Ratification of the Agreement for the Exchange of Information Relating to Tax Matters between the Kingdom of the Netherlands and the States of Jersey.

STATES OF JERSEY

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RATIFICATION OF THE AGREEMENT FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS BETWEEN THE KINGDOM OF THE NETHERLANDS AND THE STATES OF JERSEY

Lodged au Greffe on 11th December 2007 by the Chief Minister

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to ra t ify the Agreement for the exchange of information related to tax matters between the Kingdom of the

Netherlands and the States of Jersey as set out in the Appendix to the report of the Chief Minister dated 29th November 2007.

CHIEF MINISTER

REPORT

Agreement to be entered into with the Kingdom of the Netherlands for the exchange of information related to tax matters

1. T h e  States  are  asked to ratify  the signed  Agreement to  be entered  into  with  the  Kingdom of the Netherlands fortheexchangeof information relating totax matters attachedas an Appendix to this report.

Background

2. In February 2002 Jersey entered into a political commitment to support an OECD tax initiative on transparency and information exchange through the negotiationof tax information exchangeAgreements with each of the OECDMember States. Thecommitmentwas subject tothe condition that there was a level playing fieldembracing all OECDMember States, and the main competitor jurisdictions in the provision offinancial services (HongKongChina, Luxembourg, SingaporeandSwitzerland)twoof whicharealsoOECDMember States.
3. A t otally level playing field is not in immediateprospect.At the same time Jerseyremains fully committed to the principles of transparency and effective exchangeofinformation. This conflicthas been resolved by requiring an economic benefits packagewhennegotiating tax information exchangeAgreements with individual OECDMember States, a package that is expected to be sufficient to offset any "costs" that are expected tobe incurred ingoingaheadofthecreationof the desired level playing field.
4. O  n 7th July 2004 the States adopted the Taxation (Implementation) (Jersey) Law 2004, which Law enables the States to make Regulations implementing Agreementswith, and obligations owed to, the governments ofother countries and territories regardingor relating to taxation.
5. T h e  procedure adopted in  respect  of individual  Agreements is for both  parties  to  exchange signed Agreementswhich then allows both to start their ratification procedures contemporaneously. Agreements are signedby the Chief Minister in accordance with theprovisionsof Article  18(2)of the States ofJersey Law 2005 and paragraph 1.8.5 of the Strategic Plan 2006–2011 adopted by the States on 28th June 2006. Subsequent to the signing by the Chief Minister, Agreements are presentedto the States for ratification, are published, entered into the official record andRegulations are madefor the Agreements to enter into force.

Agreement with the Kingdom of the Netherlands

6. T  h e negotiations with the Kingdom of the Netherlands have produced agreementonthe following – attached as an Appendix to this report –

1 .  a T  ax Information Exchange Agreement which is consistent with that signed with the United States

of America in 2002 and ratified by the States;

2 .  a n Agreement on access to mutual Agreement procedures in connection with the adjustment of

profits for associated enterprises and the application of the Netherlands participation exemption;

3 .  a M  emorandum of Understanding in which the Netherlands –

have  recognised  Jersey's  commitment  to  comply  with  international  standards  on money laundering, terrorist financing and financial regulation;

have recognised Jersey's commitment to a policy of improving cooperation;

have agreed that six months after the entry into force of the Agreement, negotiations

will continue on further measures needed to alleviate undesired tax barriers and other obstacles of

a discriminatory nature that may be included in the domestic tax legislation of the parties. In due course it is the intention to integrate the results achieved into a double taxation Agreement.

7. T h e finance industry was consulted on the package through Jersey Finance Limited andtherewas strong support for the principle of international engagement and that signing the Agreement with the Netherlands was a reasonable placeto start. Theindustry particularly supportedthe proposed negotiation of a double taxation Agreement.
8. T h e negotiation of the Agreements has helped to establish a good relationship with officials in the Netherlands Ministry of Finance whichhasimproved their understandingof and influenced favourably their attitude towards the Island. Such Agreements do much to enhance the Island's international personality and generally to leadto a more favourable response to the Island on a wide rangeofmarket access and other economic/political issues.
9. T h e Regulations bringing the tax information exchangeAgreement into effect,which are the subject of a separate proposition (P.193/2007), are made in pursuance of Article 2(1) of the Taxation (Implementation) (Jersey)Law 2004 which provides that –

"(1)  The States may by Regulations make such provision as appears to them to be necessary or expedient

for the purposes of –

(a)  i mplementing an approved agreement or approved obligation; ..."

T h e p rior ratification by the States of the Agreement with the Kingdom of the Netherlands is required to

satisfy the above provision regarding the implementation of "an approved Agreement or approved obligation" and for the Regulations to be made.

10. T h e Regulations as drafted provide for the bringing into force of any Agreementfor the exchangeof information on tax matters to be entered into with a ThirdCountrywhich is defined as a country or territory that is listed in theSchedule.With the making of the Regulations the listing of the Kingdomof the Netherlands in the firstcolumnofthe Schedule will enable the States to fulfil its obligations to the Kingdom of the Netherlands (so faras legislation isnecessary for that purpose) under an Agreement for the exchangeof information relating to tax matters entered into on 20th June 2007.
11. T h ere are no implications for the financial or manpower resources of the States arising from the ratification and implementation oftheAgreementwiththeKingdom of the Netherlands.

29th November 2007

AGREEMENT BETWEEN THE KINGDOM OF THE NETHERLANDS AND THE STATES OF JERSEY

FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS

W h e reas the Kingdom of the Netherlands and the States of Jersey ("the parties") recognise that present legislation already provides for cooperation and the exchange of information in criminal tax matters;

W  h e reas the parties have long been active in international efforts in the fight against financial and other crimes, including the targeting of terrorist financing;

W  h er eas it is acknowledged that Jersey has the right, under the terms of the Entrustment from the UK to negotiate, conclude, perform and subject to the terms of this agreement terminate a tax information exchange agreement with the Netherlands;

W  h er eas Jersey on the 22nd February 2002 entered into a political commitment to the OECD's principles of effective exchange of information;

W  h e reas the parties wish to enhance and facilitate the terms and conditions governing the exchange of information relating to taxes;

N o w  , therefore, the parties have agreed to conclude the following agreement which contains obligations on the part of the Netherlands and Jersey only:

Article 1

Scope of the Agreement

T h e parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the parties concerning the taxes covered by this Agreement, including information that is foreseeably relevant to the determination, assessment, enforcement or collection of tax with respect to persons subject to such taxes, or to the investigation of tax matters or the prosecution of criminal tax matters in relation to such persons. A requested party is not obliged to provide information which is neither held by its authorities nor in the possession of or obtainable by persons who are within its territorial jurisdiction. The rights and safeguards secured to persons by the laws or administrative practice of the requested party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.

Article 2 Taxes Covered

1. T h i s Agreement shall apply tothefollowing taxes imposed by theparties:

1. in the caseof the Netherlands:

1. Income tax (Inkomstenbelasting)
2. Wages tax (Loonbelasting)
3. Company tax, including the Governmentshareinthe net profits ofthe exploitation of natural resources levied pursuant the Mining Act (Vennootschapsbelasting, daaronder begrepenhet aandeel vande Regering in de netto-winsten behaald metde exploitatie van

natuurlijke rijkdommen geheven krachtens de Mijnbouwwet)

4. Dividend tax (Dividendbelasting)
5. Gift tax (Schenkingsrecht)
6. Inheritance tax (Successierecht)

2. in the caseof Jersey:

  th e in c o m  e t ax ;

2. T h is Agreement shall apply also to any identical taxes imposed after the date of signature of the Agreementin addition toor in placeof the existing taxes, or any substantially similar taxes if the parties so agree.Thecompetent authority of each party shall notify the otherof substantial changes in laws whichmay affect the obligations of that party pursuant to this Agreement.

Article 3 Definitions

1. I n t hisAgreement:

" th e Netherlands" means the part of the Kingdom of the Netherlands that is situated in Europe, including its territorial seas and any area beyond the territorial sea within which the Netherlands, in accordance with international law, exercises jurisdiction or sovereign rights;

"J e r s ey" means the Bailiwick of Jersey, including its territorial sea;

"c o m  pany" means any body corporate or any entity that is treated as a body corporate for tax purposes;

" c o m petent authority" means, in the case of the Netherlands the Minister of Finance or his authorised representative; in the case of Jersey, the Treasury and Resources Minister or his authorised representative;

" c ri m inal laws" means all criminal laws designated as such under domestic law, irrespective of whether such are contained in the tax laws, the criminal code or other statutes;

" c ri m inal tax matters" means tax matters involving intentional conduct whether before or after the entry into force of this Agreement which is liable to prosecution under the criminal laws of the requesting party;

" i n fo rmation gathering measures" means laws and administrative or judicial procedures enabling a requested party to obtain and provide the information requested;

"i n f o rmation" means any fact, statement, document or record in whatever form;

"p e r s on" means a natural person, a company or any other body or group of persons;

" p u b licly traded company" means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold "by the public" if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of investors;

"p r i n cipal class of shares" means the class or classes of shares representing a majority of the voting power

and value of the company;

" re c o gnised stock exchange" means any stock exchange agreed upon by the competent authorities of the Parties;

" p u b lic collective investment scheme" means any scheme or fund, in which the purchase sale or redemption of shares or other interests is not implicitly or explicitly restricted to a limited group of investors;

" r eq u ested party" means the party to this Agreement which is requested to provide or has provided information in response to a request;

" r e q uesting party" means the party to this Agreement submitting a request for or having received information from the requested party;

"t a x " means any tax covered by this Agreement;

2. A  s regards the application of this Agreementatany time by a party, anytermnot defined therein shall, unless the context otherwise requires, have the meaning that ithasat that time under the lawsof that party, any meaningunder the applicable tax laws of that party prevailing over a meaninggiventothe term underother laws of that party.

Article 4

Exchange of Information Upon Request

1. T h e  competent authority  of the  requested  party shall  provide  upon  request  by  the requesting  party information for the purposes referred toin Article 1. Such information shallbeexchanged without regard to whether the requested partyneeds such information for its own tax purposes or the conductbeing investigated would constitute a crimeunder the laws of the requestedparty if it hadoccurredin the territory of the requestedparty.Thecompetent authority of the requesting party shall only make a request for information pursuant to this Article when it isunable to obtain the requested information byother means, except where recourse to such meanswouldgiverise to disproportionate difficulty.
2. I f t he information in the possession of the competent authority oftherequested party isnot sufficient to enable it to comply with the request for information, the requested partyshall use at its own discretion all relevant information gathering measures necessary to provide the requesting party with the information requested, notwithstanding that  the requested party may not need such information for its own tax purposes.
3. I f s pecifically requestedby the competent authority of the requesting party, the competent authority ofthe requested party shall provide information under this Article,to the extent allowableunder its domestic laws,in the form of depositions of witnessesand authenticated copiesoforiginalrecords.
4. E a c h partyshallensure that it has the authority, subject to the termsof Article 1, to obtain and provide, through its competent authority and uponrequest:

(a ) in f ormation held by banks, other financial institutions, and any person, including nominees and

trustees, acting in an agency or fiduciary capacity;

(b ) (i ) i n f ormation regarding the beneficial ownership of companies, partnerships, foundations

and other persons, including in the case of collective investment schemes, information on shares, units and other interests;

(i i) i n t h e case of trusts, information on settlors, trustees and beneficiaries,

P r o v ided that this Agreement does not create an obligation for a party to obtain or provide ownership

information with respect to publicly traded companies or public collective investment schemes, unless such information can be obtained without giving rise to disproportionate difficulties.

5. A  n y request for information shall be formulated with the greatest detail possible in specifying in writing; (a ) th e identityof the person under examination or investigation;

(b ) th e period for which the information is requested;

(c ) th e nature of the information requested and the form in which the requesting party would prefer to

receive it;

(d ) th e tax purpose for which the information is sought;

( e ) t h e reasons for believing that the information requested is foreseeably relevant to tax

administration and enforcement of the requesting party, with respect to the person identified in subparagraph (a) of this paragraph;

(f ) g ro unds for believing that the information requested is present in the requested party or is in the

possession of or obtainable by a person within the jurisdiction of the requested party;

(g ) to the extent known, the name and address of any person believed to be in possession or control of

the information requested;

(h ) a s tatement that the request is in conformity with the laws and administrative practices of the

requesting party, that if the requested information was within the jurisdiction of the requesting party then the competent authority of the requesting party would be able to obtain the information under the laws of the requesting party or in the normal course of administrative practice and that it is in conformity with this Agreement;

(i ) a st atement that the requesting party has pursued all means available in its own territory to obtain

the information, except where that would give rise to disproportionate difficulty.

6. The competent authority of the requested party shall acknowledge receipt of the request to the competent authority of the requesting party and shall use its best endeavours to forward the requested information to the requesting party with theleast reasonable delay.

Article 5

Tax Examinations Abroad

1. W  i th reasonable notice, the requesting party mayrequest that the requested partyallow representatives of the competent authority ofthe requesting partyto enter the territory oftherequestedparty,to the extent permitted under its domesticlaws, to interview individuals and examine records with the prior written consent of the individuals orother persons concerned.Thecompetent authority of the requesting party shall notify the competent authority of the requested partyofthe time and placeoftheintendedmeeting with the individuals concerned.
2. A  t the request of the competent authority of the requesting party, thecompetent authority ofthe requested party may permit representatives of the competent authority of the requesting party to attend a tax examination in the territory oftherequestedparty.
3. If the request referred to  in  paragraph 2  is  granted, the  competent authority  of the requested party conducting the examination shall, as soon as possible, notify thecompetent authority of the requesting party of the time and place of the examination, the authority or person authorised to carry out the examination and the proceduresand conditions required by the requested party for the conductof the examination.All decisions regarding the conductof the examination shallbemadeby the requestedparty conducting the examination.

Article 6

Possibility of Declining a Request

1. T h e competent authority of the requested partymay decline to assist:

(a ) w h ere the request is not made in conformity with this Agreement;

(b ) w h ere the requesting party has not pursued all means available in its own territory to obtain the

information, except where recourse to such means would give rise to disproportionate difficulty; or

(c ) w h ere the disclosure of the information requested would be contrary to public policy.

2. T h i s Agreementshallnotimpose upon a requested party any obligation to provide items subject to legal privilege, orany trade, business, industrial, commercialorprofessional secret or trade process, provided that information described in Article 4(4)shall not by reason of that factalonebe treated as such a secret or trade process
3. A  r equest for information shall not be refused on the ground that the tax claim giving rise to therequestis disputed.
4. T h e requested party shall not be required to obtain and provide information which if the requested information was within the jurisdiction of the requesting party the competent authority of the requesting party would notbe able toobtainunder its laws or in the normal course of administrative practice.
5. T h e requested partymay decline a request for information if the information is requested bythe requesting party to administer or enforce a provisionofthe tax law of the requesting party, or any requirement connected therewith, which discriminates against a national orcitizen of the requested party as compared with a nationalor citizen of the requesting party in thesamecircumstances.

Article 7 Confidentiality

1. A l l information provided and received by the competent authorities of the parties shall be kept confidential.
2. S u c h information shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the purposes specified in Article 1, and used by such persons orauthoritiesonly for such purposes, including the determination ofany appeal. For thesepurposes, information maybe disclosed in public court proceedings orin judicial decisions.
3. Such information maynotbeused for anypurposeother than for the purposes stated in Article 1 without the express written consent of the competent authority of the requested party.
4. Information provided to a requesting partyunder this Agreementmaynotbe disclosed toany other jurisdiction.

Article 8 Costs

U n l e ss the competent authorities of the parties otherwise agree, indirect costs incurred in providing assistance shall be borne by the requested party, and direct costs incurred in providing assistance (including costs of engaging external advisors in connection with litigation or otherwise) shall be borne by the requesting party. The respective competent authorities shall consult from time to time with regard to this Article, and in particular the competent authority of the requested party shall consult with the competent authority of the requesting party in advance if the costs of providing information with respect to a specific request are expected to be significant.

Article 9 Language

R e q u ests for assistance and responses thereto shall be drawn up in English.

Article 10

Mutual Agreement and Arbitration Procedures

1. W  h ere difficulties ordoubts arise between the parties regarding the implementationor interpretation of this Agreement, the respective competentauthoritiesshall use their best efforts to resolve thematterby mutualagreement.
2. I n addition to the agreements referred toin paragraph  1, the competent authorities ofthe parties may mutually agreeontheproceduresto be used under Articles 4, 5 and 8.
3. T h e parties shallagree on otherformsof dispute resolution should this become necessary.

Article 11 Entry into Force

T h i s Agreement shall enter into force when each party has notified the other of the completion of its necessary internal procedures for entry into force. Upon the date of entry into force, it shall have effect;

(a ) fo r criminal tax matters on that date; and

( b ) f o r all other matters covered in Article  1 on that date, but only in respect of taxable periods

beginning on or after that date or, where there is no taxable period, all charges to tax arising on or after that date.

Article 12 Termination

1. T h i s Agreement shall remain inforce until terminatedby either party.
2. E  itherpartymay after the expiration oftwoyears from the date of its entry into force terminate this Agreementby giving notice of termination in writing. Such termination shallbecome effective on the first day ofthe month followingthe expiration of a period of threemonthsafter the date of receipt of notice of termination by the other party. Allrequests received up to the effective date of termination will be dealt with in accordance with the termsof this Agreement.
3. I f th e Agreementis terminated the parties shallremain bound by the provisions of Article  7 with respect to any information obtained under this Agreement.

In w  itness whereof the undersigned being duly authorised in that behalf by the respective parties, have

signed the Agreement.

D o n e at _________in duplicate this _________ day of _______, 200___, in  the English language

FOR THE GOVERNMENT OF FOR THE

THE KINGDOM OF THE NETHERLANDS: STATES OF JERSEY:

Agreement between the Kingdom of the Netherlands and the States of Jersey on the access to mutual agreements procedures in connection with the adjustment of profits of associated enterprises and the application of the Netherlands participation exemption

The Government of the Kingdom of the Netherlands And

The States of Jersey................

Desiring to strengthen their economic relationship and to encourage the international trade have agreed to conclude the following Agreement which contains obligations on the part of the Parties only:

Chapter I Taxes covered and Definitions Article 1

Taxes covered

This Agreement shall apply to taxes on income and profits.

Article 2

Definitions

1. F o r the purposes of this Agreement,unlessotherwisedefined:

a)  t h e term "Party" means the Netherlands or Jersey as the context requires;

b ) t h e term "the Netherlands" means the part of the Kingdom of the Netherlands that is situated in

Europe, including its territorial sea, and any area beyond the territorial sea within which the Netherlands, in accordance with international law, exercises jurisdiction or sovereign rights;

c)  t h e term Jersey. means the Bailiwick of Jersey including its territorial sea;

d ) t h e term "competent authority" means

i) in th e case of the Netherlands the Minister of Finance or his authorized representative;

ii ) i n t h e case of Jersey, the Treasury and Resources Minister or his authorised representative;

2. A  s regards the application of this Agreementatany time by a Party, any termnot defined therein shall,

unless the context otherwise requires, have the meaning that it has at that time under the law of that Party, any

meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.

Chapter II The adjustment of profits of associated enterprises Article 3

Scope of Chapter II

1. C h a pter IIof this Agreementshallapplywhere, for the purposes of taxation, profits which are included in the profits ofan enterprise of a Partyare also included or are also likely tobeincluded in the profits ofan enterprise of the other Party onthegrounds that the principles set out in Article 4,and applied either directly or in correspondingprovisionsof the law of the Party concerned, have not been observed.
2. P a r agraph 1 shallalsoapplywhereanyof the enterprises concerned havemade losses rather than profits.

Article 4

Principles applying to the adjustment of profits of associated enterprises

Where:

1. a n enterprise of a Party participates directly or indirectly in the management, control or capital of an enterprise of the otherParty,or
2. t h e same persons participate directly or indirectly inthemanagement, control or capital of an enterprise of a Party and an enterprise of the otherParty,

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

Article 5 General provision

Where a Party intends to adjust the profits of an enterprise in accordance with the principles set out in Article  4, it shall inform the enterprise of the intended action in due time and give it the opportunity to inform the other enterprise so as to give that other enterprise the opportunity to inform in turn the other Party. However, the Party providing such information shall not be prevented from making the proposed adjustment.

Article 6

Mutual agreement procedures

1. W  h ere an enterprise considersthat, in anycase to which this Agreementapplies, the principles set out in Article  4 havenot been observed, it may, irrespective ofthe remedies provided by the domestic law of the Party concerned, present its case to the competentauthorityof the Partyofwhichit is anenterprise.The casemustbe presented within three yearsof the first notification of the action which is contraryoris likely to becontrary to the principles setout in Article  4.Thecompetent authority shall then without

delay notify the competent authority of the other Party.

2. T h e competent authority shall endeavour, if the objection appears to ittobe justified and if it isnot itself able toarriveat a satisfactory solution, to resolve the casebymutualagreement with the competent authority oftheother Party, with a view to the avoidance of taxation whichisnotinaccordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Parties.
3. T h e competent authorities of the Parties maycommunicate with each other directly forthepurposeof reaching anagreementinthesenseof the precedingparagraph.
4. T h e competent authority of a Party shall notbe obliged to initiate the mutualagreementprocedurewhere legal or administrative proceedings have resulted in a final ruling that by actions giving rise to an adjustment of transfers of profits under Article 4 one of the enterprises concernedis liable to a serious penalty. In addition, the competent authority of a Party shall not be obliged to initiate the mutual agreementprocedure if the enterprise has not fulfilled thedomesticdocumentationand/or information requirements of the adjusting Partybeforetheassessmentinwhich the adjustment is incorporated was finalized.
5. T h e Parties mayalso agree onother forms of dispute resolution including arbitration.
6. N o twithstanding the previous paragraphsof this Article, the competentauthoritiesofthe Parties may mutually agree to amend the procedures to be used under this Article taking into account the developments with respectto the EUConventionon the Elimination of Double Taxation in connection with the Adjustmentof Profits of Associated Enterprises and the developments relating tothemutual agreementprocedure discussion within the OECD.

Chapter III The application of the Netherlands Participation Exemption Article 7

Specific rules for the application of the Netherlands Participation Exemption

The competent authorities of the Parties may agree on the conditions for the application of the participation exemption of the Netherlands with regard to participations in Jersey with a view to prevent double taxation.

Chapter IV Final Provisions Article 8

Entry into force

1. T h isAgreement shall enter into forcewheneach party has notified the otherofthecompletion of its necessary internalprocedures for entry into force. TheAgreement shall apply to proceedings referred to in Article 6(1) which are initiated after its entry into force.
2. N o twithstanding paragraph 1 of this Article, the Agreement shall only enter into force when the Agreementbetween the Kingdomofthe Netherlands and Jersey for the exchangeof information relating to tax matters shallhaveeffect for criminalaswellascivil tax matters.

Article 9 Termination

1. T h i s Agreementisconcluded for a periodof five years. Sixmonthsbefore the expiry of that period, the Parties will meetto decide ontheextension of this Agreementand any otherrelevantmeasure.
2. N  o twithstanding paragraph 1 of this Article, this Agreement will be terminated, without givingnoticeof termination, on the date of termination of the Agreement between the Kingdomof the Netherlandsand Jersey for theexchangeof information relatingto tax matters.

In w  itness whereof the undersigned being duly authorised in that behalf by the respective parties, have

signed the Agreement.

D o n e at _________in duplicate this _________ day of _______, 200___, in  the English language

FOR THE GOVERNMENT OF FOR THE

THE KINGDOM OF THE NETHERLANDS: STATES OF JERSEY:

Memorandum of Understanding

The Netherlands and Jersey seek a broader economic and trading relationship. Both parties have long been active in international efforts in the fight against financial and other crimes including fiscal crimes and each recognises the other's commitment to comply with international standards on money laundering, terrorist financing and financial regulation.

The Netherlands and Jersey are committed to deepening their relationship through cooperation on greater transparency and exchange of information on tax matters and with the objective of achieving a double taxation agreement taking account of the specific characteristics of the tax systems of both parties. Thereby the relationship between the Netherlands and Jersey is and will continue to be enhanced to the parties' mutual benefit.

The Netherlands recognises Jersey's commitment to a policy of improving co-operation, reflected, inter alia, in the signing by Jersey of an Agreement on the Taxation of Savings Income with the Netherlands and each of the other EU Member States. Furthermore, the Netherlands recognises Jersey's commitment towards the work of the OECD's Global Forum on Taxation to achieve a global level playing field in the areas of transparency and effective exchange of information for tax purposes.

The Netherlands and Jersey have agreed to introduce immediately:

• a tax information exchange agreement;

• a mutual agreement procedure in connection with the adjustment of profits of associated enterprises;

• a mutual agreement procedure in connection with the conditions for the application of the Netherlands participation exemption and, on this basis, a mutual understanding that will secure the application of the

Netherlands participation exemption in accordance with the rules as set out in the Netherlands corporate income tax Act.

Six months after the entry into force of these instruments negotiations will continue on further measures needed to alleviate undesired tax barriers and other obstacles of a discriminatory nature that may be included in the domestic tax legislation of the parties. In preparation for resuming negotiations the Netherlands and Jersey will study their respective tax systems to identify which undesired tax barriers and other obstacles should be addressed. In due course it is the intention to integrate partial results achieved into a double taxation agreement.

Two years after the date of the entry into force of the measures signed today, the Netherlands and Jersey will jointly evaluate the results achieved and will consider which further steps may be necessary.

Formal communications, including requests for information, made in connection with or pursuant to the provisions of the Agreements entered into will be in writing directly to the competent authority of the other party at the addresses given below, or such other address as may be notified by one party to the other from time to time. Any subsequent communications regarding requests for information will be either in writing or verbally, whichever is most practical, between the earlier mentioned competent authorities or their authorised representatives.

In the case of the Netherlands the address is –

The Fiscal Information and Investigation Service/Economic Investigation Service, Belastingdienst/FIOD-ECD/Team Internationaal,

Postbus 59395

1040 KJ Amsterdam

In the case of Jersey the address is –

The Minister for Treasury and Resources PO Box 353

Cyril Le Marquand House

The Parade

St Helier

JE4 8UL

For the Government of the Kingdom of the Netherlands State Secretary for Finance

(Jan Kees de Jager)

For the States of Jersey Chief Minister (Senator Frank Walker )