Ratification of the Convention on Mutual Administrative Assistance in Tax Matters

STATES OF JERSEY

RATIFICATION OF THE CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS

Lodged au Greffe on 26th November 2013 by the Minister for External Relations

STATES GREFFE

2013   Price code: C  P.154 (re-issue)

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to agree that Jersey should join the Convention on Mutual Administrative Assistance in Tax Matters, as set out in the report of the Minister for External Relations dated 12th November 2013.

MINISTER FOR EXTERNAL RELATIONS

REPORT

1. The States  are  asked  to agree  that Jersey  should join  the  Convention  on Mutual Administrative Assistance in Tax Matters done in Strasbourg on 25th January 1988 as amended by the Protocol done in Paris on 27th May 2010 (the  "Convention").  A  copy  of  the  amended  Convention  is  attached  as Appendix 1to this report.
2. Jersey  is fully  committed  to supporting  a  number  of  international  tax initiatives being promoted by the G8, G20, and the OECD. One of these initiatives being advanced by the G20 is encouraging all jurisdictions to join the Convention. To quote from the Tax Annex to the St. Peter sburg G20 Leader's  Declaration  (September  2013) –  "All  G20  countries  have led  by example in signing this Convention and to date more than 70 countries and jurisdictions  are  covered  or  are  likely  to be  covered  by  the  Convention, including significant financial centres. The Convention is a powerful tool in the  fight  against  tax  evasion  and  allows  all  forms  of  cooperation  in tax matters,  including  automatic  exchange  of  information.  We  expect  all jurisdictions to join the Convention without further delay."
3. The Convention can only be signed by a Sovereign State. However, Article 29 provides  that  any  State  may  by  a  declaration  addressed  to one  of  the Depositories request the extension of its ratification of the Convention to any other territory specified in the declaration. In respect of such territory, the Convention shall enter into force on the first day of the month following the expiration of a period of 3 months after the date of receipt of such declaration by the Depository.
4. Earlier this year in response to an approach from Her Majesty's Government, the  Crown  Dependencies  and  the  Overseas  Territories  confirmed  their willingness to join the Convention. With this in mind, agreement has been reached with H.M. Treasury on the wording of the letter the United Kingdom would send to the Depository requesting the extension to Jersey of the United Kingdom's ratification of the Convention. Also agreed is a separate letter indicating that Jersey expresses its consent to be bound by the Convention, subject  to certain  Reservations  and  Declarations.  The Reservations  and Declarations have also been entered by the other Crown Dependencies and also match the position taken by other jurisdictions, including G20 members. Both letters are attached as Appendix 2to this report.
5. In  joining  the  Convention,  Jersey  will  be  extending  multilaterally  the exchange of information on request presently provided for by the bilateral Tax Information  Exchange  Agreements  (TIEAs)  that  Jersey  has  entered  into. Jersey  will  also  be  accepting  automatic  and  spontaneous  exchange  of information,  the  former  by  mutual  agreement  between  the  Parties  to the Convention. The OECD, at the request of the G20, is to bring forward early in 2014 a single standard for automatic exchange of information based on the US FATCA  which  would  have  global  application.  As  is the  case  with  many jurisdictions,  Jersey  is reserving  its  position  on  the  provisions  in the Convention relating to assistance in the recovery of tax claims.

6. The United Kingdom have requested that before the letters are sent to the Depository,  the  Island  has  in place  the  necessary  legislation  to put  the Convention into effect. If the States agree to join the Convention and accept the obligations, they will immediately thereafter be asked to make Regulations to give  effect  to the  provisions  of  the  Convention.  The  Regulations  will provide for the provisions of the Taxation (Exchange of Information with Third  Countries)  (Jersey)  Regulations  2008  to be  applied  to  requests  for information received by the Jersey Competent Authority (the Taxes Office) from Convention partners.
7. To assist  with  the  implementation  of  the  Convention,  there  has  been established a co-ordinating body (see Article 24 of the Convention) composed of  representatives  of  the  competent  authorities  of  the  Parties,  which  will monitor the implementation and development of the Convention, under the aegis of the OECD. The OECD have confirmed that, although Jersey will not be a signatory, its competent authority will have a seat on the co-ordinating body  in its own  right  in the  same  way  as  with  the  Global  Forum  on Transparency and Exchange of Information for Tax Purposes.

Financial and manpower implications

8. There are no immediate implications for the financial or manpower resources of  the  States  arising  from  joining  the  Convention.  However  if,  as  more jurisdictions join the Convention, there is a significant increase in the number of requests for information there could be a need to supplement the resources of the Taxes Office as the Competent Authority.

12th November 2013

 _____________________________________________________________________ Re-issue Note

This  Projet  is  re-issued  because  the  2 letters  now  attached  as  Appendix 2  were omitted from the original publication due to an administrative error.

APPENDIX 1

APPENDIX 2