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STATES OF JERSEY
ENTRY INTO FORCE OF THE
PROTOCOL AMENDING THE JERSEY - MAURITIUS DOUBLE TAXATION AGREEMENT (2017)
Presented to the States on 24th April 2025 by the Minister for External Relations
STATES GREFFE
2025 R.55
REPORT
This Report to the States Assembly provides an update following the signature of the Protocol amending the Double Taxation Agreement ("DTA") concluded between Jersey and Mauritius in 2017 and notifies the Assembly of the impending entry into force of the Protocol.
Annexes
• Annex I – PROTOCOL BETWEEN MAURITIUS AND JERSEY AMENDING THE AGREEMENT OF 3 MARCH 2017 FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
• Annex II – 2017 AGREEMENT BETWEEN MAURITIUS AND JERSEY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
MINISTER FOR EXTERNAL RELATIONS 24 April 2025
EXECUTIVE SUMMARY
As part of the Island's efforts to maintain its alignment with global minimum standards and best practices regarding international tax and transparency, the Government of Jersey has undertaken negotiations to update a number of existing cross-border tax agreements.
This includes the DTA signed with Mauritius in 2017, which will be amended by a Protocol concluded with the Government of Mauritius in 2023. The Protocol is not expected to impact the majority of taxpayers, and no objections were raised by the multiple stakeholders engaged through the consultation process conducted prior to signature.
Following completion by both Jersey and Mauritius of the respective necessary procedures to bring the Protocol into force, the provisions of the Protocol will have effect from the 2026 tax year.
BACKGROUND
As an associate of the OECD's Inclusive Framework on Base Erosion and Profit Shifting ("BEPS"), Jersey is required to ensure that its network of DTAs are compliant with the minimum standards set out in BEPS Actions 6 and 14. These require jurisdictions to ensure that wording is included in their DTAs which prevents their use for abusive purposes (Action 6) and to improve the operation of the mutual agreement procedure (MAP), which provides recourse for taxpayers who believe that a DTA has not been properly applied in their case (Action 14).
The OECD developed model text for jurisdictions to use to amend their DTAs to bring them in line with BEPS. Jersey implemented these changes in the majority of our existing DTAs following the ratification by the States Assembly on 15th November 2017 of the multilateral legal instrument ("MLI"), which allowed jurisdictions to amend some types of bilateral DTAs on a multilateral basis.
As an early adopter of the MLI (Jersey was the third jurisdiction to ratify the MLI), Jersey did not include the Mauritius DTA in its list of agreements to be covered by the MLI as, at the time of ratification of the MLI, Jersey had not ratified the DTA with Mauritius. By the time Mauritius entered the MLI process in 2019, however, the DTA had been ratified (in October 2018) and Mauritius therefore included it in its list of covered agreements. The mismatch between the two lists meant that the MLI does not apply to the Jersey/Mauritius DTA.
To ensure that the agreement is compliant with the BEPS minimum standards, therefore, the two jurisdictions agreed to negotiate the necessary amending Protocol, with negotiations being conducted in March 2023.
NEGOTIATIONS
The intention of the negotiations was to ensure that Jersey's agreement with Mauritius is compliant with the BEPS minimum standards. The Protocol therefore reflects this position, with the following salient features:
• Changing the title of the agreement to include references to the elimination' of double taxation (where previously it referred to the avoidance' of double taxation) and to the prevention of tax evasion and avoidance (where previously it had referred only to fiscal evasion with respect to taxes on income).
• The replacement of the original preamble with an updated version stating the intention of the agreement is to preclude the use of the relevant agreement for tax evasion, tax avoidance, or treaty shopping.
• The replacement of the first paragraph of the MAP article, which introduces the ability of a qualifying taxpayer who believes he has not been treated in accordance with the provisions of the agreement to bring his case to the authorities of either Jersey or Mauritius, instead of only the jurisdiction of which he is resident.
• The inclusion of an article limiting the entitlement of a taxpayer to treaty benefits where a particular transaction was structured in such a way with the main purpose of obtaining a benefit under the treaty. Notwithstanding this, the Protocol permits a tax authority to grant treaty benefits even where this test is failed, if it considers that the benefits would have been available in the absence of the transaction.
Revenue Jersey has advised that the impact of the amendments under the Protocol will be relatively limited for most taxpayers, as the changes to the preamble and the insertion of the entitlement to benefits article are anti-abuse measures intended specifically to prevent the misuse of the agreements. The changes to the MAP article will, in theory, make it easier for taxpayers to obtain redress if needed, but in practice these articles have been very rarely invoked.
CONSULTATION AND SIGNATURE
In line with the process for concluding cross-border tax agreements:
- The Economic and International Affairs Scrutiny Panel received a briefing on the Protocol and no issues were raised.
- A consultation process was undertaken with the members of the Fiscal Strategy Group of Jersey Finance Limited, who did not raise any questions or concerns.
- In line with the process set out in the 2019 Letter of Entrustment, whereby the UK confirmed the circumstances in which it is content for Jersey to negotiate tax agreements in its own name, the UK Ministry of Justice was consulted and indicated that the Protocol gave rise to no concerns on its part.
On this basis, the Minister for External Relations signed the Protocol on 8 July 2024 in Jersey. The Minister of Finance, Economic Planning and Development for the Government of Mauritius signed the Protocol in Mauritius on 9 August 2024.
NEXT STEPS
As stated in Article 5 of the Protocol, the agreement will enter into force upon confirmation by both Parties that the respective procedures for domestic approval of the Protocol have been concluded. The provisions of the Protocol will have effect from the tax year beginning the year following the year of entry into force.
Following this notification to the States Assembly the Minister for External Relations will seek to inform Mauritius of the completion of Jersey's domestic procedures by the end of the first week of May 2025. Jersey is yet to receive notification that Mauritius has completed its own domestic procedure.