Economy and Banking Sector of Jersey

Location Europe; an island in the English Channel
Population (2011)97 857
EU Status not part of the EU
Dependent Territory Of United Kingdom (British Crown Dependency)
Economy
National Currency GBP (Pound sterling)
Credit Ratings (as of Sep 2016)
    Fitch-
    Moody's-
    S&PAA- high grade
Taxation
Withholding Tax 0.0 - 20.0%
Double Taxation Agreements 10 signed agreements
Information Exchange 
    Exchange on Request 34 signed agreements
    Automatic Exchange starts in September 2017
FATCA IGA in effect since 13 December 2013, Model 1
Banking Sector
Deposit Guarantee Scheme 
    Maximum Protected Amount 50 000 GBP
Country Ceiling for Deposits 
    Foreign CurrencyAaa prime
Banking Supervision Financial Services Commission
Banking Sector Structure 
    Number of Banks33
 List of Banks in Jersey

Taxation in Jersey

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding tax rates applied on payments of interest and dividends in Jersey are shown in Table 1.

Dividends Interest
Natural person, resident 20.00.0
Natural person, non-resident 0.00.0
Table 1. Withholding tax rates in Jersey.
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Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

Jersey signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Estonia
 Guernsey (Jul 2013)
 Hong Kong (Jul 2013)
 Isle of Man (Jul 2013)
 Malta
 Poland
 Qatar
 Singapore (May 2013)
 United Kingdom

There are also several agreements between Jersey and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

 Luxembourg (Apr 2013)
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Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Jersey signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Argentina
 Australia
 Austria (Jun 2013)
 Canada
 China
 Czech Republic
 Denmark
 Faroe Islands
 Finland
 France
 Germany
 Greenland
 Iceland
 India
 Ireland
 Japan (Aug 2013)
 Latvia (Dec 2013)
 Mexico
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 South Africa
 Sweden
 Turkey (Sep 2013)
 United Kingdom
 United States

There are also several agreements between Jersey and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Brazil (Jan 2013)
 Hungary (Jan 2014)
 Indonesia
 Italy
 Slovenia (Nov 2013)
 Switzerland (Sep 2013)

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Jersey signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information

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FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Jersey has FATCA agreement with the U.S. in effect since 13 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Jersey are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Jersey's financial accounts hold in U.S. financial institutions will be reported to Jersey's authorities.

Further Information:
FATCA and European countries

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Jersey's Banking Sector

Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Jersey are summarised in Table 2.

Scheme Participantsall credit institutions operating in Jersey (including branches of foreign banks), branches of Jersey's banks abroad
Eligible Depositorsprivate individuals, charities
Covered Accountsall deposit accounts
Covered Currenciesall
Maximum Protected Amount50 000 GBP
Paid In CurrencyGBP

Table 2. Deposit guarantee scheme in Jersey.

Further Information:
Deposit Guarantee Schemes in European Territories

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Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Foreign currency deposit ceiling for Jersey] is Aaa (prime).

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Banking Sector Structure

Currently there are 33 credit institutions operating in Jersey.

All the credit institutions operating in Jersey can be classified into several categories. Table 3 summarises the number of banks in each category.

CategoryNumber of Banks
Banks12
Branches of foreign banks21

Table 3. Number of banks by category in Jersey.

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