Jersey’s Minister for Treasury and Resources, Deputy Ian Gorst.
Last week’s Government Plan contained a unique package of tax measures that we are rolling out from 2024. The package has two important aims:
- To boost business productivity by promoting investment in Regulatory Technology, through a 150% super-deduction for RegTech spend.
- To remove tax barriers that currently create uncertainty and cost for businesses with staff moving into and out of the Island.
Technology – the Fourth Industrial Revolution
We are in the middle of a global digital revolution. Artificial Intelligence (AI), cloud technology, machine learning, blockchain, big data analytics and other technologies are rapidly changing the way many sectors in our economy operate – from financial services to housing and agriculture, from retail to government and the public sector.
Harnessing investment in technology will drive improvements in Jersey’s productivity and international competitiveness and it will help us make best use of our scarce human resources. There is huge potential for the Island waiting to be grasped.
The RegTech Super-Deduction pilot programme
Jersey’s international finance centre is at the forefront of global banking, corporate services, funds, investment management and private wealth. It is the cornerstone of our economy, contributing roughly two-thirds of company income taxes and more than half of total tax revenues (after accounting for International Service Entity (ISE) fees and personal income taxes from employees in the finance industry).
At a time when staff in Jersey are in huge demand for risk and compliance roles in this sector, the accelerated adoption of regulatory technology has the capacity to bring transformational change. Firms of all sizes will be able to work with service providers to speed up client onboarding using digital technology. This will deliver more efficient processes and enable staff and other scarce internal resources to be focused on more targeted monitoring of risk and higher value-added roles. The targeting of resources in this way should bring economic benefit not only to the firms themselves but more broadly across the Island’s economy.
The new 150% super-deduction that we are proposing on a pilot basis for 2024 and 2025 (with the potential to be extended if successful) will be an important contribution to this work. It will cover expenditure on hardware, software and training related to RegTech and is uniquely designed for entities regulated by the Jersey Financial Services Commission – a sector of the economy that pays corporate income tax.
“This super-deduction has been developed following detailed consultation with industry and I welcome the support it has received from the Jersey Financial Services Commission (JFSC), Digital Jersey and Jersey Finance. It will complement a broader programme of work being undertaken to drive RegTech adoption with the goal of securing a sustainable future for Jersey.”
Removing tax barriers for internationally mobile workers
In addition to the RegTech Super-Deduction, Government Plan 2024 – 2027 also contains proposals to modernise the tax treatment of internationally mobile workers, making it easier to attract overseas staff and global talent right across the economy.
My proposals will support Jersey’s mobile workforce by relieving the cost of double taxation and reducing red tape for short-term business visitors.
A bright future for a global hub
As the Government of Jersey, we are focused on maintaining a vibrant and competitive business environment on the Island that embraces technology and continues to attract international talent. This innovative tax package is an important signal of our ambition and commitment to securing Jersey as a progressive economy and an investment location of choice.
Further notes on the measures to support staff mobility:
- One of the cornerstone policies of this year’s Government Plan is the introduction of credit-based relief for foreign double taxation on employment income.
- This means that Jersey residents who work abroad and are taxed in the foreign country will receive a credit in Jersey for this overseas tax, to minimise double taxation.
- This change will make it more cost effective for Jersey individuals to travel into overseas markets to expand their business, thus bolstering Jersey’s export potential.
Inbound workers on short term assignments to Jersey
- The Government Plan also announced a 60-day tax exemption threshold for short-term business visitors to Jersey.
- This measure is in line with international practice.
- It is designed to regularise the tax treatment of professionals who travel to Jersey for short-term assignments or meetings and ease administration.
- This simplified process will encourage international collaboration and investment in Jersey and encourage business visits to the Island, with knock-on benefits for local industries.