Partnerships: Jersey tax reporting - 2023 onwards

With the introduction of economic substance rules for partnerships (which broadly came into effect for the 2022 tax year), it was inevitable that Revenue Jersey would require partnerships that have a connection to Jersey to complete some form of annual tax reporting. The relevant legislative changes were agreed by the States Assembly (Jersey’s Parliament) in December 2022 and the first practical stage of the reporting process has commenced with “Tax Registration” notices arriving for partnerships through the post over the last week or so. This briefing note provides a high-level overview, in practical terms, of the changes to the Jersey tax reporting required by partnerships.

Historically, very few partnerships were required to register with Revenue Jersey, now each of the following partnerships will be required to complete some annual tax reporting in Jersey:

• A partnership which is formed/incorporated in Jersey;
• A partnership which has its place of effective management in Jersey;
• A partnership which earns profits and gains that result in one or more partners having an obligation to submit a Jersey tax return (for example, where a partnership is undertaking trading activities in the Island); or
• A partnership which is required to provide information on its economic substance position

Partnerships which are already registered with the JFSC should be automatically registered with Revenue Jersey – hence the recent issuance of “Tax Registration” notices outlined above.  Clients would be well advised to complete a reconciliation by the end of March 2023 to ensure that they have received “Tax Registration” notices for all of their partnerships which are registered with the JFSC.

For those partnerships with a reporting obligation but which are not registered with the JFSC, there is a requirement to register with Revenue Jersey (through an online form); our expectation is that this will be most relevant in the context of non-Jersey established limited partnerships which have their general partner based in the Island.  To complete the registration form the partnership will need to provide details of where it was established, its activities and the nomination of a responsible partner (see below).

The obligation to discharge the annual tax reporting needs to fall on a person who can be contacted through an address in Jersey – the “responsible partner”.   The “responsible partner” should be aware that any penalties for non-compliance with the annual tax reporting obligations will fall on the “responsible partner” rather than the partnership more generally.

Another on-line form has been created to allow partnerships to nominate their “responsible partner”.  To the extent that a partnership does not nominate a “responsible partner”, Revenue Jersey will determine the “responsible partner” (whilst noting that limited partners are precluded from being a responsible partner).  To maintain control of the process and understand who has the legal obligations, clients would be well advised to go through the process of nominating a “responsible partner”.

The actual annual tax reporting will then take the form of the “partnership combined notification”, which needs to be filed by 30 November in the year following the tax year; with late filing penalties applying where the deadline is not met.  The first “partnership combined notification” will need to be filed by 30 November 2023 in respect of the partnership’s activities during the 2022 tax year.

This briefing note does not outline the content of the “partnership combined notification” in detail; however, consistent with the Jersey corporate tax return, the amount of information that needs to be provided in the “partnership combined notification” will depend on the partnership’s activities (e.g. if the partnership is in the scope of the economic substance requirements it will need to provide information relevant to how it meets those requirements).  

Concerned with meeting your/your clients’ Jersey tax reporting obligations for partnerships? Why not consider outsourcing the process to KPMG – as tax agent we can guide you through the process and handle the filing of all the relevant forms including: (i) registration of your partnerships with Revenue Jersey, (ii) nomination of responsible partners, and (iii) submission of the partnership combined notifications. Outsourcing the process to KPMG will reduce the administration time incurred by your staff members whilst mitigating the risks inherent within any new tax reporting obligation.

Please reach out to a member of our team if you have any questions.