Embracing global tax initiatives - Jersey’s implementation of Pillar Two rules

Key points

• Jersey’s response to Pillar Two rules includes the introduction of a multinational corporate income tax (MCIT) and implementation of an income inclusion rule (IIR). The rules will apply for periods starting on or after 1 January 2025 to groups with consolidated turnover of EUR 750m.
• The MCIT is not a QDMTT and will be levied at the rate of 15% on net GloBE income in Jersey. The IIR will apply to Jersey ultimate or immediate parent entities.
• MCIT gives credit for taxes paid under certain blended CFC regimes. US headed groups in particular should take note as tax paid under the GILTI regime may be creditable.
• While the MCIT broadly follows the OECD Model Rules on Pillar Two there are some differences in implementation. Groups should consider how the rules will apply to their Jersey entities and what steps they should take to comply with...