Jersey And Guernsey Response To Pillar Two Framework On Global Tax Rates

Introduction

Guernsey and Jersey have today issued a joint statement with the Isle of Man on their intentions to implement the OECD global initiative to set a minimum effective tax rate for the world's largest multinational enterprises, known as Pillar Two.

The Islands have announced their intention to implement an "income inclusion rule" and a domestic minimum tax to provide for a 15% effective tax rate for large in-scope multinational enterprises ("MNEs"), from 2025.

The Islands will monitor implementation internationally and adapt their implementation of the tax rate accordingly to global developments.

Pillar Two

Pillar Two is a new set of international tax rules that seek to establish a global minimum corporate tax rate. Global anti-base erosion rules ("GloBE rules") will impose top-up taxes where the effective rate of tax of a MNE in a jurisdiction is below the global minimum corporate tax rate of 15%.