Jersey is a British Crown dependency, situated in the English Channel. Jerseyis a "self-governing possession" of the British Crown and is considered internationallyas a "territory for which the United Kingdom is responsible" rather than a sovereign state.Jersey is not a part of the European Union, although it's withinthe European Union's customs area.
Financial services sector (banks, fund managers, investment trusts, accountancy and legal firms) is the main contributor to the GDP of Jersey, followed by tourism and hospitality services.
Banking landscape of Jersey is rather diversified and includes British clearing banks, merchant banks, private banks and a range of international banking groups.
Jersey's official currency is the Pound sterling (GBP): Jersey is with the United Kingdom. Jersey pound is a local issue of banknotes and coins denominated in GBP rather than a separate currency.
|Nominal GDP (2015)||Real GDP Growth (2015)|
|4.1 bln GBP (+0.03%)||2.0 % (2014: 4.0 %)|
According to Government of Jersey, nominal GDP of Jersey in 2015 was 4.1 bln GBP.
Jersey outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.9% over the past 2 years (2013 - 2015). In 2015 real GDP growth was 2.0% which was above the Euro Area average (1.6%) and above the European Union average (1.9%).
Chart 1. Real GDP Growth in Jersey. Source: Government of Jersey.
|CPI, Year Average (2016)|
|1.9 % (2015: 1.0 %)|
According to Government of Jersey, inflation rate in Jersey in 2016 expressed as annual percentages of average consumer prices was 1.9% which was above the Euro Area average (0.2%) and above the European Union average (0.3%).
Chart 2. Inflation Rate in Jersey. Source: Government of Jersey.
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.
|Natural person, resident||20.0 %||0.0 %|
|Natural person, non-resident||0.0 %||0.0 %|
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 1 January 2013 the date of coming into force is given in brackets):
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 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Jersey signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Jersey and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Jersey signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Jersey has signed bilateral agreements with 51 jurisdictions to automatically receive information:
Jersey has signed bilateral agreements with 59 jurisdictions to automatically send information:
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).
|FATCA Status in Jersey|
|IGA in effect since 13 December 2013, Model 1|
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.
|Maximum Protected Amount|
|50 000 GBP|
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:
All these details about deposit guarantee scheme in Jersey are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Jersey (including branches of foreign banks), branches of Jersey's banks abroad|
|Eligible Depositors||private individuals, charities|
|Covered Accounts||all deposit accounts|
|Maximum Protected Amount||50 000 GBP|
|Paid In Currency||GBP|
Table 2. Deposit guarantee scheme in Jersey.
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.
|Local Currency (Pound sterling)||Foreign Currency|
Foreign currency deposit ceiling for Jersey is Aaa (prime).
Financial Services Commission
|Number of Banks|
|Consolidated Assets (2016)|
|134.88 bln GBP (-16.52%)|
Currently there are 27 credit institutions operating in Jersey.
In 2016 consolidated banking assets in Jersey were 134.88 bln GBP. The consolidated banking assets' evolution is shown at Chart 3 below.
Chart 3. Consolidated banking assets 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.
|Category||Number of Banks|
|Branches of foreign banks||19|