The government of Jersey on November 8 announced that it may amend its tax laws to add a substance test for tax residence, responding to allegations that the island nation is being used for tax avoidance by multinationals, including Apple.
On Sunday, the International Consortium of Investigative Journalists published a trove of leaked financial documents from the offshore law firm Appleby, Singapore-based Asiaciti Trust, and 19 government corporate registries, shedding light on the world of offshore finance and multinational firm tax avoidance.
Use of Jersey as a destination for tax avoidance was featured prominently in the papers, and was highlighted in an article discussing how Apple turned to Jersey after political pressure caused Ireland to shut down the “double Irish” tax scheme. Jersey’s corporate tax rate for foreign companies is 0 percent.
In a statement, the Jersey government pledged to investigate the allegations.
“Jersey does not want abusive tax avoidance schemes operating in the island and expects financial services providers to abide by a voluntary code to say they will not take on this kind of business. If this proves to be such business, we will consider how to strengthen our arrangements, if necessary by amending our legislation to introduce a substance test. It is not satisfactory for a foreign registered company to claim tax residence in Jersey without demonstrating a substance here,” the government said.
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