Goods and Services Tax (Jersey) Law 200- Amendments P.37/2007

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A decision made (12/04/2007) regarding: Goods and Services Tax (Jersey) Law 200- Amendments P.37/2007.

Subject:	Goods and Services Tax (Jersey) Law 200- Amendments
Decision Reference:	MD-TR-2007-0043	Exempt clause(s):		N/A
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:		SL/2/11/04/07
Written Report – Title	Goods and Services Tax (Jersey) Law 200- (P.37/2007) Amendments	Written report - author		Steve Lowthorpe – Director, GST
Decision(s): The Minister received and approved amendments prepared by the Law Draftsman to the Goods and Services Tax (Jersey) Law 200- (P.37/2007), the purpose of which was -  To replace the term Finance Vehicle with International Services Entities (ISE) as being a closer reflection of the reality of the Finance Industry.  To remove any uncertainty regarding the status and treatment of Finance Vehicles / ISE under Part 12 (they are not within the definition of “taxable person”).  To withdraw the partial refund scheme for banks on the basis that banks will be eligible for inclusion as an ISE under the flat rate scheme proposed under Articles 57 to 60. The Minister received and approved an accompanying report prepared by the department to accompany the draft amendments. The Minister decided to withdraw the Goods and Services Tax (Jersey) Law 200- (P.37/2007), 3rd amendments.
Reason(s) for decision: Following submissions from Jersey Finance Limited, as summarised in the Report attached to MD-TR-2007-0042, these amendments were considered necessary.
Action required: Officers to forward the draft amendment and accompanying report to the Greffier for immediate lodging and debate on Tuesday 17th April 2007. Greffier to be notified of the Minister’s decision to withdraw the Goods and Services Tax (Jersey) Law 200- (P.37/2007), 3rd amendments.
Signature: (Minister/ Assistant Minister)			Date of Decision: 12 April 2007

Goods and Services Tax (Jersey) Law 200- Amendments P.37/2007

TREASURY AND RESOURCES MINISTER

Goods and Services Tax (Jersey) Law 200- Amendments

1. Background

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.

2. Comments

In the light of this decision, and following extensive consultation during 2006 with the business community and the wider public, law drafting on the above law has now concluded and the final draft of the law was lodged au Greffe for debate by the Assembly on 17th April 2007.

3. Amendments

Following subsequent representations from Jersey Finance Limited (JFL), the

Minister is advised that the following amendments to the Law should be made:

To replace the term Finance Vehicle with International Services Entities (ISE) as being a closer reflection of the reality of the Finance Industry.

To withdraw the partial refund scheme for banks on the basis that banks will be eligible for inclusion as an ISE under the flat rate scheme proposed under Articles 57 to 60.

To remove any uncertainty regarding the status and treatment of Finance Vehicles / ISE under Part 12 (they are not within the definition of “taxable person”).

Reasons for the Amendments

As a result of recent detailed analysis of the law undertaken in conjunction with Jersey Finance Limited it is now considered that the partial refund scheme for banks (as proposed in Part 12) could result in significant complexity for the finance industry, requiring the need for additional administrative (non value adding) resources for industry, as well as the additional government resources necessary to administer the complexity.

Furthermore, complex law could potentially undermine the simplicity of Jersey based structures and client advice and may damage the competitiveness of the finance industry.

The proposed amendment will address the first two points and allow a more

measured first step that can be assessed for effectiveness within a year. In particular the proposed approach should provide greater certainty regarding the ability to raise the targeted £5m - £10m, whilst not ruling out the ability to apply greater complexity if found to be necessary in due course.

In addition to provide greater certainty of treatment the law has been amended to clarify the status of a Finance Vehicle/ ISE. Any such body listed under Part 12 would not be considered a taxable person for GST purposes.

5. Financial and Manpower Implications

There are no financial or manpower implications resulting from these amendments.

States Treasury For Ministerial Decision meeting on 11th April 2007