Taxes in Jersey

The island Jersey is part of a group of channel islands that lie in the English channel, 12 nautical miles from Normandy, France.
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They have a different taxation system there for both corporations and personal income tax filings for residents which is both competitive and reduces the country’s dependence on the monetary necessity of taxes.Taxes in Jersey 2015

Corporate Taxation
Since 2009, Jersey has used an uncommon zero/ten method for taxation of corporations. This means that the standard rate of corporate income tax is zero percent, and any financial service companies are charged ten percent for their tax rate. Certain companies do get charged a higher 20 percent tax rate but only if they have rental, utility income, or if they have any profits that they received from property development. Any companies with connected sister companies that file a Jersey tax return with a zero percent tax rate are allowed to let the sister company claim any losses they have to help reduce taxes for the sister company if it had more profit.

Unlike many countries, Jersey does not have a capital gains tax. They also do not charge taxes for capital transfers or purchases. Instead, they have a flat five percent goods and services tax rate. The European Union has expressed concerns over the zero/ten policy, but says it does not go against the Code of Conduct on Business Taxation that all European countries must follow.

Personal Income Taxation
For about the last nine years, Jersey has used a tax payment installment system for income tax that residents have to pay. That means that everyone makes installments consistently towards the payment due annually. They no longer use an annual lump sum payment system for taxes due. Unlike the United States, residents of the country have until the last Friday of the month of May each year to file their return for the previous year. If they will be using an accountant or accounting firm to have their taxes done, then they have two more months of time, and the tax return is not due until July then. No one in the country pays higher than 20% for a tax rate. Those of higher incomes have lower tax allowance amounts. Residents with low incomes often do not have to pay taxes on their income at all. They have a marginal relief program that reduces the amount of tax owed.

Residents only pay taxes on the amount of their income that goes over the marginal relief amount. As mentioned above, the country’s tax system is very unique. They have no basic tax brackets as other countries do. Individual tax rates are based on your estimated income amount. If you don’t have an estimated income amount, then employers automatically deduct 20% of your pay for taxes.