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6.5. Deduction of Cross-Border Payments and Non-Deductible Expenses

Expenses are generally allowed as deduction if they are incurred wholly and exclusively for the purpose of business.

The following expense types are not deductible or have limited deductibility for Jersey tax purposes:

  • Capital expenditure is not deductible;
  • Goodwill is non-deductible;
  • Charitable contributions are non-deductible, subject to certain exceptions;
  • Penalties and fines are not deductible; and
  • Interest  incurred on any disallowed expenditure is not deductible (effective 1 January 2022).

Further effective 1 January 2022, it has been clarified that borrowing costs include interest charges and the incidental costs of obtaining borrowings, including fees paid when a loan is obtained, for example, an arrangement fee, or the costs of securing a loan.