Convention on Mutual Administrative Assistance in Tax Matters: Lodged 'au Greffe'

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A decision made 21 November 2013:

Decision Reference: MD-C-2013-0141
Decision Summary Title :	Report and proposition to join the Convention on Mutual Administrative Assistance in Tax Matters		Date of Decision Summary:	21st November 2013
Decision Summary Author:	Project & Research Officer		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Report and proposition to join the Convention on Mutual Administrative Assistance in Tax Matters		Date of Written Report:	12th November 2013
Written Report Author:	Adviser – External Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Report and proposition to join the Convention on Mutual Administrative Assistance in Tax Matters
Decision(s): The Minister agreed to lodge ‘au Greffe’ the report and proposition to join the Convention on Mutual Administrative Assistance in Tax Matters for debate by the States at the earliest opportunity.
Reason(s) for Decision: 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. This follows an initiative being advanced by the G20 in which it is encouraging all jurisdictions to join the Convention. Agreement has been reached with HM Treasury on the wording of the letter the UK would send to the Depository requesting the extension to Jersey of the UK’s ratification of the Convention. Before the letters are sent to the Depository the UK has requested that 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.
Resource Implications: 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.
Action required: The Greffier of the States to be requested to arrange to lodge ‘au Greffe’ the report and proposition to join the Convention on Mutual Administrative Assistance in Tax Matters for debate by the States at the earliest opportunity.
Signature:		Position: Minister for External Relations
Date Signed:		Date of Decision (If different from Date Signed):

Convention on Mutual Administrative Assistance in Tax Matters: Lodged 'au Greffe'

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 12 November 2013

CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS

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 an appendix to this report.
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 Petersburg 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.”
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 three months after the date of receipt of such declaration by the Depository.
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 HM 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 an appendix to this report.
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.
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) Regulations 2008, as amended, to be applied to requests for information received by the Jersey Competent Authority (the Taxes Office) from Convention partners.
To assist with the implementation of the Convention there has been established a coordinating 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 coordinating 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

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