This Is Jersey

Jersey is not a member state nor is it an associate member of the European Communities.

However, for the purposes of the movement of manufactured and agricultural goods, it is included in the European Communities tariff barriers and the Island is required to apply the common external tariff, the agricultural levies on imports from third countries and certain provisions of the Common Agricultural Policy. Jersey is treated as a “third country” in EC provisions not applicable to the Island, such as fiscal harmonisation and financial services.

Because Jersey is not a member of the EU, it is not eligible for certain benefits granted to members. Thus, those born in Jersey face restrictions when working in EU countries other than the UK. Channel Islanders who do not have a connection with the UK through a parent or grandparent or who do not have five years ordinary residence in the UK do not have the automatic right to work or settle in EU countries. The following note is included in their passports: ‘The holder is not entitled to benefit from European Community provisions relating to employment or establishment.’

However, because Jersey is not an EU member state, it can have a duty free regime if it chooses. So although inter-EU duty free ended on 30 June 1999, duty free is still available to passengers to and from Jersey. Historically, duty in the Island has been set at a much lower rate than in the UK and Western Europe. Value Added Tax (VAT), currently at 17.5 per cent in the UK, has never been applied in Jersey a Goods and Services Tax at 3.0 per cent was introduced in 2008.

The Island is often considered to be duty free because the lower duty regime and absence of VAT enabled selling prices to be about the same as those found in duty free shops around the world. The duty free allowance is 200 cigarettes or 50 cigars or 250 grammes of tobacco, plus one litre of spirits or two litres of wine, plus 60cc of perfume and 250cc of eau de toilette.

While Jersey is not obliged to follow EU directives, as part of the Island’s ‘good neighbour’ policy, it attempts to match European standards in many areas of Island life. In particular to ensure that international markets remain open to the finance sector, Jersey has voluntarily agreed to follow EU measures to limit harmful tax competition. This means that certain types of tax exempt company, which have been very important in the growth of the finance industry, will no longer be allowed. EU residents with bank accounts in Jersey also have to either pay a withholding tax or have details of their account reported to the tax authorities where they are resident.