Government of Jersey

Information about the publication of Ministerial Decisions

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A decision made (26/02/2008) The GST legislation – amendments to the Amendment Law mainly involving Part 12 (covering treatment of the Financial Services Industry (FSI) and in particular International Services Entities).

Decision Reference: MD-TR-2008-032 (replaces MD-TR-2008-0029)
Decision Summary Title:	Goods and Services Tax – Legislation – Amendments to the Law		Date of Decision Summary:	25th February, 2008
Decision Summary Author:	Steve Lowthorpe – Director GST (Income Tax)		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	Steve Lowthorpe – Director GST (Income Tax)
Written Report Title:	Goods and Services Tax (Amendment) (Jersey) Law 200-(P.17/2008): Amendments		Date of Written Report:	25th February, 2008
Written Report Author:	Steve Lowthorpe – Director GST (Income Tax)		Written Report : Public or Exempt?	Public
Subject: The GST legislation – amendments to the Amendment Law mainly involving Part 12 (covering treatment of the Financial Services Industry (FSI) and in particular International Services Entities).
Decision(s): The Minister approved the draft Goods and Services Tax (Amendment) (Jersey) Law 200- (P.17/2008): Amendments and asked that they be lodged ‘au Greffe’ on 26th February 2008.
Reason(s) for Decision: To complete the supporting legal framework and present the law covering the treatment of Financial Services Industry under the GST system (which will be implemented as from 1st May 2008) in a way that achieves the policy objectives but is easier to understand. Please note that this decision replaces MD-TR-2008-0029 which has been rescinded – decision should have been ‘public’ not ‘exempt’
Resource Implications: None
Action required: Send report and amendments to the Publications Editor at the Greffe.
Signature:		Position: Senator Le Sueur, Minister for Treasury & Resources
Date Signed: 29 February 2008		Date of Decision:

The GST legislation – amendments to the Amendment Law mainly involving Part 12 (covering treatment of the Financial Services Industry (FSI) and in particular International Services Entities).

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STATES TREASURY ITEM NO:

REPORT

TREASURY AND RESOURCES MINISTER

GOODS AND SERVICES TAX (amendment) (jERSEY) law 200-(P.17/2008): AMENDMENTS

The States Assembly agreed on 13th May 2005 (P.44/2005) to introduce a broad-based, 3% Goods and Services Tax (GST) as from 2008. The GST Primary Law was approved by the Assembly on 18th April 2007, was included on the Privy Council agenda on 25th July and subsequently given Royal Assent. It was registered in the Royal Court on 17th August.

The main “core” of supporting legislation in the form of GST Regulations was then approved under the following timetable:- consultation document and draft Regulations available 3rd August; consultation for 4 weeks; lodged 11th September; States debate and approval 23rd / 24th October.

It was stated at the time that Regulations under Part 12 of the GST Law relating to Financial Services Industry (FSI) / International Services Entities (ISE) would be dealt with as a separate exercise.

Following a consultation exercise in November 2007 the GST (International Services Entities) (Jersey) Regulations were lodged on 15th January and originally scheduled for States debate on 26th February.

The regulations included an extended graduated flat rate scheme for service providers to replace the partial refund scheme originally proposed under Part 12 of the law (under Articles 61 & 62). As a result these Articles are to be deleted and some linked changes (place of residence; ISE status; annual fee payment; partnerships included in a group registration) included under an amendment law.

At the same time as the above FSI linked changes were made the opportunity was taken to make some additional amendments in the interests of clarification / interpretation (retail schemes; rounding; imports) and some corrections to the law. The amendment law was lodged on 29th January and is scheduled for States debate on 11th March.

Following a recent meeting with the Corporate Affairs Scrutiny Panel, together with further feedback mainly from professionals and the business community, some further changes have been made to the ISE regulations and amendment law. The changes which relate mainly to the treatment of ISEs do not alter the policy objectives and are mainly aimed at simplification and improving presentational style.

The intention now is for the ISE regulations and the amendment law to be debated together on 11th March.

Financial and Manpower implications

It is still estimated that 10 staff will be required to administer the tax at an approximate operating cost of £1 million per annum.

However, a 3% GST should generate approximately £45 million per annum in taxation revenue net of operational costs.

Of that £45 million, it is expected that some £5-10 million will be derived from the FSI under procedures covered by the amended law and the ISE regulations.

25 February, 2008