Indirect tax snapshot
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Goods and Services Tax (GST) is the main type of indirect taxation in Jersey.
GST is a tax on consumption which is applied on the supply of most goods and services. It is also applied to goods upon importation into Jersey. Although GST is ultimately borne by the consumer by being included in the price paid, the responsibility for charging, collecting and paying it to the tax authority rests with the business making the supply i.e. the sale.
GST must be charged on a supply of goods or services in Jersey by a registered person in the course of furtherance of a taxable activity carried on by that person —this is referred to as output tax. Any GST on costs incurred in generating such supplies can be claimed — this is referred to as input tax. The difference between the output tax and the deductible input tax in each accounting period will generally be the amount of GST payable by the business to Revenue Jersey. Where the input tax exceeds the output tax, a refund can be claimed.
A taxable activity generally means any activity which is carried on continuously or regularly, whether or not for pecuniary profit, and involves or is intended to involve the supply of goods and services to another person for a consideration.
There are two rates of GST that are applied to goods and services in Jersey - standard rate (5%) and zero rate (0%). In addition, some goods and services are exempted from the tax. The most common exempt supplies include financial services.
Generally, businesses that make exempt supplies are unable to claim input tax on costs incurred generating those supplies, so the GST paid to suppliers is a ‘real’ cost to these businesses.
However, there is the ability for businesses that operate either within the Financial Services sector or where businesses supply mainly goods or services to non-Jersey residents to elect to fall within the International Service Entity regime and not apply GST to what appears to be taxable supplies and also to be able to recover any GST that they have suffered / or exempt them from being charged GST in the first place. This is covered in greater detail in Section 14.
Goods imported into Jersey are subject to GST. This is imposed by Jersey Customs at the ports of entry. The GST (plus any duties and other fees) must be paid by the importer at the time of importation in order for the goods to be released unless the importer has registered under the approved trader scheme.
Where the goods imported are for use in the taxable activity, the importer (if GST registered) can recover the GST. GST is charged on the value of the importation, including any customs duty, freight and insurance. If the importer is GST registered they can register as an approved trader and their goods will be released by Customs without incurring any GST charge. They would then account for any GST on their quarterly GST return. It is important to note the interaction between GST and customs duty. Customs duty is levied upon the importation of certain goods into Jersey. Unlike other indirect taxes, such as GST, once duty has been paid it is not recoverable by the importer. It therefore represents a final cost to the importing business.
A person who either makes or intends to make taxable supplies of goods or services in the course or furtherance of a taxable activity must register for GST if the value of its taxable supplies in Jersey exceeds UKP300,000 or is expected to exceed this limit within any 12 month period.
A person can register on a voluntary basis even if the registration limit has not been reached.
The £300,000 registration threshold also applies to non-Jersey established businesses.
Non-Jersey established businesses are only able to register for GST in Jersey if their taxable supplies are generated when the time of supply occurs within Jersey.
Time of supply arises at the earlier of an invoice being issued or payment being received.
Yes – electronically supplied services are deemed to be supplied where they are received. Any GST due would be accounted for under the reverse charge provisions if GST registered. If the customer is not GST registered no GST charge will arise.
The ‘reverse charge’ procedure means that service providers who have no business establishment in Jersey don't have to register for GST, as long as their customers are.
No, this is not a requirement. However, depending upon the types of supplies being made, the logistical considerations and the volume of transactions, non-residents may engage with a local agent to facilitate the filing of the requisite GST returns.
GST returns may be filed quarterly or annually depending upon the level of taxable supplies in a 12-month period.
A quarterly return period is the default filing frequency in Jersey.
All GST returns must be submitted on last day of the following month, together with any payment.
There is an annual accounting scheme which can be utilised by businesses which met certain criteria.
Late filing penalties and surcharges are imposed if GST returns, and the relevant payments are not lodged by the due date.
Yes. A range of penalties can be imposed where businesses do not comply with the GST legislation.
If an error is identified and voluntarily disclosed to Revenue Jersey this may reduce any penalty exposure (depending upon the nature of the offence and whether the disclosure was made pre or post audit notification).
An overseas business can use the refund scheme if they are registered as a business outside Jersey and meet the following conditions:
• It is not registered in Jersey for GST, and it does not have to, or cannot, register here
• It does not have a place of business or a residence in Jersey, and
• It does not make any sales in Jersey and its business is a registered 'taxable person' under a similar indirect tax scheme to Jersey
• its country of residence operates a similar refund scheme which is available to Jersey businesses
If the overseas business country of incorporation has its own refund scheme but does not make it available to Jersey businesses, then it will not be able to claim a refund under the Jersey scheme.
A GST invoice must show:
• an invoice number which is unique and sequential
• the seller's name and address
• the seller's GST registration number
• the invoice date
• the time of supply (also known as tax point) if this is different from the invoice date
• the customer's name and address
• a description sufficient to identify the goods or services supplied to the customer
• the rate of any cash discount
• the total amount of GST charged expressed in UK£
For each different type of item listed on the invoice, the following must be shown:
• the unit price or rate, excluding GST
• the quantity of goods or the extent of the services
• the rate of GST that applies to what's being sold
• the total amount payable, excluding GST
Where a GST invoice includes zero-rated or exempt goods or services, it must:
• show clearly that there is no GST payable on those goods or services
• show the total of those values separately
An input claim can only be made if a valid tax invoice is held at the time the GST return is lodged. Simplified invoices are available for certain businesses.
GST invoices can be issued, received, and stored in electronic format and there is no need to tell the tax authority. Electronic invoices must contain the same information as paper invoices. The method used to ensure the authenticity of origin, the integrity of content and legibility of the invoices is a business choice and can be achieved by any business controls which create a reliable audit trail between an invoice and a supply of goods or services.
It is possible for two or more persons can be registered together as a GST group if they satisfy certain control conditions.
A person cannot be treated as a member of more than one GST group at a time.
The main advantage of GST group registration is that, apart from a few limited exceptions, any supply of goods or services by a member of the group to another member of the group is disregarded for GST purposes. This reduces the risk of GST being accidentally omitted on supplies between separately registered, but associated persons.
However, there are some disadvantages and any decision on whether to group register should be carefully considered. For example, all GST group members (including former members) are jointly and severally liable for the GST debt of the group during the period of their membership.
The ISE scheme is an alternative to GST registration. ISEs are not required to register for GST nor charge GST as its supplies are not taxable.
The following businesses can be included on the list of ISEs maintained by Revenue Jersey or by a trust company business which has been authorised to keep a list of ISEs:
• Banks registered under the Banking Business (Jersey) Law 1991 to undertake deposit-taking business;
• Trust company businesses registered as such under the Financial Services (Jersey) Law 1998
• Fund services businesses registered as such under FSJL;
• Functionaries of collective investment funds holding permits pursuant to the Collective Investment Funds (Jersey) Law 1988 (CIF).
The following businesses can be included on either the lists kept by Revenue Jersey or maintained by an authorised trust company business:
• collective investment funds established pursuant to CIF;
• unregulated funds established pursuant to the Collective Investment Funds (Unregulated Funds)(Jersey) Order 2008;
• limited partnerships, limited liability partnerships;
• trustees of trusts; and
• an Anstalt, Stiftung, or foundation.
There are a number of conditions which need to be satisfied in order to register as an ISE.
There are various ISE fees payable to Revenue Jersey dependent on the nature of the organisation. The fees are payable on an annual basis.
Each ISE upon payment of their annual fees are issued with an End User Relief Certificate (EURC) or a Certificate of Coverage from the trust company which they will provide to their suppliers which will exempt the supplier from the requirement to charge the ISE GST.
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