Introduction to Jersey
Location and history
Jersey is the largest of the Channel Islands. It is located in the English Channel in the Bay of St. Malo at 49 deg. N 2 deg. W. The Island covers about 116 sq. km. and the population is approximately 91,000. About 30% live in the capital and financial centre, St.Helier. The Island has a history dating back many centuries and there is evidence of human activity as much as 250,000 years ago. Jersey was linked to Brittany until 933 A.D. and in the tenth century it became a possession of the Duchy of Normandy. In 1204 when the English Crown lost the French possessions, Jersey remained loyal and it has ever since been a dependency of the British Crown. Victor Hugo spent several years in exile here.
Jersey Government
Jersey is known as a Bailiwick. The Bailiff is appointed by the Crown and presides over the legislative body, known as the States. He is also the president of the Royal Court. The Lieutenant Governor represents the British monarch. The States consists of 54 members elected for a six-year term, Lieutenant Governor and the Dean of Jersey. The latter two officers do not have a vote. Jersey is internally self-governing. The British Government is responsible for foreign affairs and defence. The Island is associated with the European Union by virtue of the treaty of accession entered into by the United Kingdom. The main industries are financial services, agriculture and tourism.
Jersey Taxation
Jersey did not set out to be a tax haven. It has existed on low taxes for centuries and this eventually attracted outside business. Residents pay income tax at a rate of 20%. There is no capital gains tax, no estate tax and no value added tax. A 3% goods and services tax is to be introduced in 2008. Companies set up on the Island by non-residents, known as Jersey exempt companies, and which did not trade locally were originally exempt from tax, but In order to meet its international obligation to operate a tax regime, which treats both onshore and offshore companies in the same manner, Jersey has been required to change its tax laws. The Jersey exempt company will be phased out between 2008 and 2011. From 2008 all new companies whether owned by residents or non-residents will be taxed at a zero rate.
The European Savings Tax Directive applies in Jersey and individuals resident in a country covered by the Directive and receiving savings interest from a Jersey source have the option of paying a withholding tax, failing which the income is reported to the tax authorities in their home country.
Regulation of the Jersey Financial Services sector
The Jersey Financial Services Commission is the statutory body, established in 1998, which regulates the financial services industry. In addition to the regulation of banking, insurance and fund management companies, there is a licensing system for businesses providing company formation and management services and trustee services.
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