OECD: Pillar Two transitional qualified status achieved by Jersey and Isle of Man
Local implementation of the income inclusion rule (IIR) under the Pillar Two framework
The Organisation for Economic Co-operation and Development (OECD) recently updated its list of jurisdictions granted “transitional qualified status” for the local implementation of the income inclusion rule (IIR) under the Pillar Two framework (read TaxNewsFlash).
The August 2025 update added Jersey and the Isle of Man (joining Guernsey) to the list, providing multinational enterprises (MNEs) operating in these jurisdictions with greater certainty regarding their tax compliance obligations.
The transitional qualified status mechanism was introduced as an interim measure to ensure jurisdictions implementing Pillar Two rules align with the OECD’s Global Anti-Base Erosion (GloBE) Model Rules. This status is granted through self-certification by jurisdictions, followed by a review process involving other implementing jurisdictions. The mechanism prevents double taxation during the transitional period and offers MNEs legal certainty while jurisdictions finalize their compliance frameworks.
Jersey enacted the Multinational Corporate Income Tax (Jersey) Law 2025, effective January 1, 2025, focusing on IIR compliance without adopting a domestic minimum top-up tax (DMTT). Guernsey and the Isle of Man, also effective January 1, 2025, implemented both IIR and qualifying domestic minimum top-up tax (QDMTT) provisions.
Read a September 2025 report prepared by the KPMG member firm in the Crown Dependencies