Crown Dependencies announce joint approach to Pillar Two Framework
On 19 May 2023, Treasury Ministers from Guernsey, Jersey and the Isle of Man announced that they have agreed on a joint approach to the implementation of the Organisation for Economic Co-operation and Development's (OECD) Pillar Two global minimum tax framework for large multinational groups.
The decision ensures certainty for businesses in each of the jurisdictions.
Guernsey, Jersey and the Isle of Man each intends to implement an "Income Inclusion Rule" (IIR) and a domestic minimum tax to provide for a 15% effective tax rate for large in-scope multi-national organisations (defined as those with annual global revenue above €750 million) from 2025. Most businesses in Guernsey and Jersey will be outside of the scope of Pillar Two and will therefore see no change to their current corporate tax rates.
Announcing the decision, The States of Guernsey, Government of Jersey and Isle of Man Government pledged to continue to work together, monitoring implementation internationally and remaining committed to maintaining attractive and globally competitive investment environments.
The joint announcement comes as many jurisdictions begin to implement the OECD’s Pillar Two framework on a global minimum tax. Further detail on the Crown Dependencies statement is available from the States of Guernsey and Government of Jersey websites.
Please contact your usual Carey Olsen relationship partner or a member of our Guernsey or Jersey corporate practice if you have any questions or would like to discuss the announcement in more detail.
