On 26th April, Appleby published an article saying that on 26th April the governments of Guernsey, the Isle of Man and Jersey released a guidance note on the economic substance requirements that apply to certain companies in those jurisdictions. This follows the recent removal of all three Crown Dependencies from Annex II of the EU ECOFIN list of non-cooperative jurisdictions for tax purposes. It provides welcome clarification in a number of areas (detailed in the article), but it does not provide any further clarity on the meaning of the term “adequate”, which is used in some of the key requirements in the substance legislation, nor does it clarify the process that will be used by local tax officials to determine whether a company meets the substance requirements. It acknowledges that it is a work in progress and, in particular, information on IP holding companies, and the reduced substance requirements for pure equity holding companies, will follow in subsequent guidance.
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