Crown Dependencies Release Updated Economic Substance Guidance

The governments of Guernsey, the Isle of Man and Jersey have today released version 2.0 of their joint guidance on the economic substance requirements that apply to certain companies in those jurisdictions. For further information on those requirements see our previous notes here and here.

The revised guidance builds on version 1.0 of the guidance, which was published in April 2019, and provides additional guidance in the following key areas:

Core income generating activities:

• The revised guidance goes further than before by prohibiting a relevant sector company from undertaking core income generating activities (CIGA) outside the island in which it is tax resident.  It explains that this does not include non-income generating activities.  It is not clear whether this prohibition would extend to activities that do generate income (but not in a relevant sector).