Pillar Two IT System Implementation (Pillar 2)

Description

On 22 October 2024, Jersey’s States Assembly unanimously adopted the following package of Pillar 2 legislation for multinational groups of enterprises in scope of Pillar 2, applicable for accounting periods beginning on or after 1 January 2025, namely: 1. IIR - The Multinational Taxation (Global Anti-Base Erosion – IIR Tax) (Jersey) Law 202-; and 2. MCIT - The Multinational Corporate Income Tax (Jersey) Law 202-. The Government of Jersey has confirmed that it will not be implementing an Undertaxed Profits Rule at this time. The Pillar 2 legislation will only apply to multinational groups of enterprises with more than €750 million global annual revenue. All other businesses that are below the €750 million threshold will see no impact and will remain under Jersey’s existing corporate income tax regime. Under the Multinational Corporate Income Tax, Jersey companies and Jersey branches of in-scope multinational groups will pay an effective rate of 15% on their Jersey profits from 2025. Furthermore, under the Income Inclusion Rule law, Ultimate Parent Entities and/or Intermediate Parent Entities, based in Jersey, will be subject to a top-up tax on their non-Jersey profits, in certain limited circumstances. The Government of Jersey is committed to ensuring that taxpayers are provided with the highest standards of customer service in implementing the new Pillar 2 regime in Jersey. As such, Revenue Jersey has begun development work on a new IT portal that will provide the simplest possible interface for Pillar 2 taxpayers to deal with their obligations under the MCIT and the IIR. To date, Revenue Jersey has undertaken work to systematically identify and map the requisite Pillar 2 business process that will inform the procurement and design of the new IT solution that will underpin the Pillar 2 portal. To this end, the Expression of Interest (EOI) aims to set out the objectives necessary to deliver a customer focused and user-friendly IT solution capable of achieving the desired outcomes, as set out in more detail in the EOI. The EOI aims to outline the scope of the Pillar 2 solution, the minimum viable product features and functionality of the system as well as the key timelines and milestones for delivery of the product. Keywords: Taxation, Pillar 2, Software development