Taxation of international executives.
When are tax returns due? That is, what is the tax return due date?
For individuals without a tax agent, Jersey income tax returns are due on the last Friday in May following the end of the tax year. For individuals with a tax agent, the deadline to file the Jersey income tax return is the last Friday in July following the end of the tax year.
What is the tax year-end?
What are the compliance requirements for tax returns in Jersey?
Jersey income tax returns must be filed with the Comptroller of Taxes annually.
What are the current income tax rates for residents and non-residents in Jersey?
20% plus a long-term care contribution of 1%
Income tax table for 2017
|Taxable income bracket||Total tax income below bracket||Tax rate on income in bracket|
|From GBP||To GBP||GBP||GBP|
|Standard rate: 0||162,504||21||21%|
|Income in excess of long term care:||162,505||20||20%|
|Single marginal: 0||14,550||0||0%|
|Married Marginal: 0||Over||0||26%|
For the purposes of taxation, how is an individual defined as a resident of Jersey?
Is there a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country for more than 10 days after their assignment is over and they repatriate.
Yes – 1 night spent in available accommodation (i.e. available to you to use as and when you wish)
What if the assignee enters the country before their assignment begins?
The residency threshold addresses the aggregate days spent in the year.
Are there any tax compliance requirements when entering or leaving the country?
The assignee is required to complete a registration and exit form.
What if the assignee comes back for a trip after residency has terminated?
The assignee will not be classed as resident as long they do not spend a night in available accommodation or the individual spends no longer than 183 days in Jersey and shows no intention of remaining in Jersey permanently.
Do the immigration authorities in Jersey provide information to the local taxation authorities regarding when a person enters or leaves Jersey?
Will an assignee have a filing requirement in the host country after they leave the country and repatriate?
If they are resident in Jersey for part of the year of assessment, the assignee will be required to complete a Jersey income tax return for the relevant period spent in Jersey.
Do the taxation authorities in Jersey adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in Jersey considering the adoption of this interpretation of economic employer in the future?
Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?
What categories are subject to income tax in general situations?
Are there any areas of income that are exempt from taxation in your country? If so, please provide a general definition of these areas.
Per Special Enactment
No tax is payable under the Income Tax Act by a person who is exempted from paying income tax by any other enactment in force in Barbados. For example, statutory instruments under Cap. 67B of the Laws of Barbados.
Are there any concessions made for expatriates in your country?
Concession P7 – under this published concession, no assessment will be raised upon a bonus paid to an assignee whilst living in Jersey, subject to the following conditions;
Is salary earned from working abroad taxed in Jersey? If so, how?
If an individual is classed as Jersey resident and ordinarly resident, the individual will be taxed on their worldwide income, however, if an individual is Jersey resident but not ordinarily resident, they will only be subject to Jersey tax on Jersey source income as well as any income remitted into Jersey.
To be considered resident but not ordinarily resident, the individual may be in Jersey on a short-term contract, generally less than 2 years, whose centre of life is abroad.
To be considered resident and ordinarily resident, the individual will spend a substantial amount of time on the island during the year, and have available accommodation. Available accommodation is considered to be accommodation which you spend any amount of time in and is available as and when you wish.
Accomodation provided by your employer is regarded as available if the contract is for 2 years or more.
Are investment income and capital gains taxed in your country? If so, how?
Investment income is taxed at a rate of 20%.
Stock options are taxed on grant on the difference between the exercise price and the normal market value (discounts are available dependant on the vesting period).
Foreign exchange losses which arise from capital transactions will be outside the scope of tax in Jersey as capital gains tax is not levied in Jersey.
Capital gains are not taxed in Barbados; therefore there is no tax on gains arising from the sale of an individual’s principal residence.
There is no capital gains tax in Barbados. Accordingly, capital losses are irrelevant for tax purposes.
Gains or losses realized on the disposition of personal use items are generally on account of capital. Therefore, there is no tax assessable on such gains or losses.
There are no gift taxes levied in Jersey. Benefits in kind are however subject to income tax in Jersey subject to certain limits.
If you are resident in Jersey and classed as ordinarily resident, you will be subject to Jersey income tax at a rate of 20% on income arising from foreign property. If you are resident but not ordinarily resident, you will only be taxable on property income remitted into Jersey.
Are there capital gains tax exceptions in your country? If so, please discuss.
What are the general deductions from income allowed in your country?
A deduction is permitted in relation to all losses and outgoings to the extent that they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on business for the purpose of gaining or producing such income, except to the extent to which they are losses or outgoings of a capital, private, or domestic nature, or are incurred in relation to the gaining or producing of exempt income. In addition, deductions are specifically permitted for certain types of expenditures such as the following :
What are the tax reimbursement methods generally used by employers in your country?
Current year gross-up is the normal method of recognising tax reimbursements paid by the employer.
How are estimates/prepayments/withholding of tax handled in your country? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.
Deductions from employment income are covered under the PAYE system.
If an individual is paid and/or employed, the employer will be required to withhold tax from their salary and wages and remit the tax to Barbados Taxation Office.
At the end of the year the employer will provide the individual with a Statement of Remuneration paid and deductions during the year. The document is used to prepare the income tax return.
When are estimates/prepayments/withholding of tax due in your country? For example, monthly, annually, both, and so on.
For employed persons, the company is required to withhold and remit, the tax computed on a monthly basis and pay to the Barbados Revenue Authority by the 15th of the following month.
Withholding taxes on interest income derived is a final tax for the individual.
Is there any Relief for Foreign Taxes in your country? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?
Where tax is payable in a country other than Barbados on profits, income or gains derived from sources in that country, the tax so payable in that country shall be allowed as a credit against the tax payable in Barbados on such profits, income or gains.
The tax credit shall not exceed the amount of tax, as computed before the credit is given, which is attributable to the income derived outside Barbados.
What are the general tax credits that may be claimed in your country? Please list below.
In addition to the tax credits described in the deductions section, the following may also be claimed:
This calculation assumes a married taxpayer resident in Barbados with two children whose 3 year assignment begins 1 January 2015 and ends 31 December 2017.
The taxpayer’s base salary is USD100,000 and the calculation covers 3 years.
|Moving expense reimbursement||7,500||7,500||7,500|
|Interest income from non-local sources||6,000||6,000||6,000|
Calculation of taxable income
|Days in Jersey during year||365||365||365|
|Earned income subject to income tax|
|Moving expense reimbursement||0||0||0
|Total earned income||129,000||128,000||127,000|
|Total taxable income||135,000||134,000||133,000|
Calculation of tax liability
|Year-ended||2015 GBP||2016 GBP||2017 GBP|
|Taxable income as above||135,000||134,000||133,000|
|Income tax (federal and provincial) thereon||27,000||26,800||26,600|
|Long-term care (capped)||798.12||1,625.04||1,625.04|
|Non-refundable tax credits||0||0||0|
|Total income tax||27,000||26,800||26,600|
|Employee contribution to Pension Plan|
contribution to Employment Insurance (EI)