Ratification of the Agreement for the Exchange of Information relating to Tax Matters between the Government of Jersey and the Government of the Argentine Republic.

STATES OF JERSEY

RATIFICATION OF THE AGREEMENT FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS BETWEEN THE GOVERNMENT OF JERSEY AND THE GOVERNMENT OF THE ARGENTINE REPUBLIC

Lodged au Greffe on 10th August 2011 by the Chief Minister

STATES GREFFE

2011   Price code: C  P.137

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to ratify the Agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Argentine Republic as set out in the Appendix to the Report of the Chief Minister dated 9th August 2011.

CHIEF MINISTER

REPORT

Agreement to be entered into with the Argentine Republic for the exchange of information relating to tax matters

1. The States are asked to ratify the signed Agreement to be entered into with the Argentine Republic for the exchange of information relating to tax matters attached as an Appendix to this report.

Background

2. In February, 2002 Jersey entered into a political commitment to support the OECD's tax initiative on transparency and information exchange through the negotiation of tax information exchange agreements to an agreed international standard.
3. In  September  2009,  the  Global  Forum  on  Transparency  and  Information Exchange for Tax Purposes, a body of which more than 100 jurisdictions are members,  agreed  a  peer  review  process  to  assess  compliance  with  the international standard. To oversee this process, a Peer Review Group was set up chaired by France, with 4 Vice-Chairs from India, Japan, Singapore and Jersey.
4. Successive G20 Summits have encouraged jurisdictions to make progress in agreeing, implementing and abiding by the necessary international agreements for  information  exchange.  In  response  Jersey  has  maintained  an  active programme  of  negotiating  agreements  with  EU,  OECD  and  G20  member jurisdictions. This has served to enhance the Island's international personality, and generally has helped to engender a more favourable view of the Island amongst the international community.
5. The latest position in respect of the programme of negotiating tax information exchange agreements is attached as an Appendix to this report. A total of 24 tax information exchange agreements (TIEAs) and 2 double taxation agreements (DTAs) have now been signed, of which 15 TIEAs and one DTA are in force. The delay in bringing agreements into force is due to the length of time taken by the other parties to the agreements to complete their domestic procedures for the ratification of the agreements.
6. As a Vice-Chair of the Global Forum Peer Review Group, Jersey has been determined  to  lead  by  example,  and  has  attached  particular  importance  to entering  into  agreements  on  tax  information  exchange  with  G20  countries. Jersey has now signed, initialled or completed negotiation with 17 of the 19 G20 countries (the other member of the G20 is the European Union).
7. Jersey has been party to the peer review process to assess compliance with international standards, and a report on the assessment of Jersey is due to be published shortly.
8. The policy of negotiating TIEAs or DTAs is supported by the finance industry. The preference of government and the industry is for a DTA but the majority of jurisdictions  with  whom  negotiations  have  been  undertaken  have  not  been prepared to consider a DTA on the grounds that they believe they would derive little if any benefit from such an agreement.

The Agreement with the Argentine Republic

9. The Tax Information Exchange Agreement entered into with the Argentine Republic is a continuation of the ongoing programme of signing tax agreements with G20 countries.
10. Attached as an Appendix to this report is –

1. the Tax Information Exchange Agreement, which is consistent with agreements  signed  previously  with  other  countries  and  which  the States have ratified. The Agreement provides for the exchange of information on tax matters on request;
2. a letter from the Argentine Minister of the Economy to the Minister for Treasury and Resources expressing the commitment to remove Jersey from all relevant Argentine "black lists" once the Agreement is in force and there is strong evidence of its effective application;

Procedure for Signing and Ratifying the TIEA

11. The Agreement with the Argentine Republic was signed by the Assistant Chief Minister, UK and International Relations, on the 28th July 2011 in accordance with the provisions of Article 18(2) of the States of Jersey Law 2005 and paragraph 1.8.5 of the Strategic Plan 2006-2011 adopted by the States on the 28th June  2006.  The  Council  of  Ministers  authorised  the  Assistant  Chief Minister to sign on behalf of the Government of Jersey.
12. The Agreement is now being presented to the States for ratification, following which it will be published and entered into the official record. The Agreement will come into force once Jersey has notified the Argentine Republic of its ratification.  The  ratification  procedures  for  the  Argentine  Republic  were completed with the signing of the Agreement.
13. The States, on the 29th January 2008, adopted The Taxation (Exchange of Information with Third Countries (Jersey) Regulations 2008. The Schedule to these Regulations lists the third countries, and includes the taxes covered by the agreements being entered into. As further agreements are entered into, the Regulations are amended to include in the schedule the jurisdiction and the taxes concerned. The necessary Regulations to provide for the inclusion in the Schedule of the Argentine Republic and the relevant taxes will be presented to the States for adoption on due course subsequent to the ratification of the Agreement.

Financial and Manpower Implications

14. There are no implications for the financial or manpower resources of the States arising from the ratification and implementation of the Agreement with the Argentine Republic.

9th August 2011

APPENDIX

STATES OF JERSEY

A.TAX INFORMATION EXCHANGE AGREEMENTS (TIEAs)

1. TIEAs signed

Note: dates in brackets are the expected dates based on latest information from the country concerned.

2. TIEAs initialled/agreed ready for signing:

• Brazil

• Greece

• India

• Italy

• Japan

• Poland

• Republic of Korea

3. TIEAs  where  negotiations  are  well  advanced  with  a  draft  agreement exchanged:

• Hungary

• Spain

4. Jurisdictions contacted from which there has been a positive response and/or initial action has been taken:

• Austria

• Luxembourg

• Hong Kong China

• Slovenia

• Switzerland

5. Jurisdictions approached but from whom a formal response is awaited:

• EU Member States:

– Bulgaria

– Cyprus

– Latvia

– Lithuania

– Romania

– Slovak Republic

• G20 Member States:

–  Saudi Arabia

B.  DOUBLE TAXATION AGREEMENTS( DTAs)

1. DTAs signed:

• Malta –  

signed 25th January 2010

ratified by Malta February 2010

ratified by Jersey June 2010

in force – 19th July 2010

• Estonia –

signed 21st December 2010 ratified by Jersey March 2011

2. DTAs where negotiations have commenced:

• Bahrain

• Belgium

• Qatar

Enquiries concerning the above should be directed in the first instance to Colin Powell,  Adviser  –  International  Affairs  in  the  Chief  Minister's  Dept;  tel: 44(0)1534 440414; email: c.powell@gov.je

Colin Powell

Adviser – International Affairs

29th July 2011