Tax: Exchange of Information Agreement between the Governments of Jersey and Republic of Indonesia

Information about the publication of Ministerial Decisions

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 3 June 2011:

Decision Reference: MD-C-2011-0064
Decision Summary Title :	Agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Republic of Indonesia		Date of Decision Summary:	26th May 2011
Decision Summary Author:	Project and Research Officer		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Ratification of the Agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Republic of Indonesia		Date of Written Report:	4th May 2011
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt?	Public
Subject: Agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Republic of Indonesia.
Decision(s): The Chief Minister agreed to lodge ‘au Greffe’ a Report and Proposition seeking the ratification of the Agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Republic of Indonesia.
Reason(s) for Decision: The tax information exchange agreement entered into with the Republic of Indonesia is a continuation of the ongoing programme of signing TIEAs or DTAs with all OECD and G20 member countries. Indonesia is a member of the G20. Negotiations with the Republic of Indonesia have produced an agreement on the following: a) The tax information exchange agreement is consistent with agreements signed previously with other countries. The agreement provides for the exchange of information on tax matters on request. However that request has to be formulated in writing in the greatest detail possible. There can be no “fishing expeditions”. The agreement will come into force once the parties to the agreement have ratified it, and any necessary legislative steps have been taken; b) A Protocol between the Competent Authorities of the Government of Jersey and the Government of Indonesia concerning the interpretation or application of the agreement for the exchange of information relating to tax matters. The policy of negotiating TIEAs or DTAs with OECD and G20 member countries is supported by the finance industry. The Agreement with Indonesia is seen by industry as an important step in the development of an economic relationship with Indonesia which is seen as a future source of business opportunities.
Resource Implications: There are no financial or manpower implications for the States arising from the ratification and implementation of the Agreement with the Republic of Indonesia.
Action required: The Greffier of the States is asked to lodge ‘au Greffe’ the agreement for the exchange of information relating to tax matters between the Government of Jersey and the Government of the Republic of Indonesia, and to seek debate by the States Assembly at the earliest opportunity.
Signature:		Position: Senator T.A. Le Sueur, Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Tax: Exchange of Information Agreement between the Governments of Jersey and Republic of Indonesia

DRAFT REPORT AND PROPOSITION

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

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 Republic of Indonesia as set out in the Appendix to the Report of the Chief Minister dated 4th May, 2011.

REPORT

Agreement to be entered into with the Republic of Indonesia 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 Republic of Indonesia 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 with each of the OECD Member States.

3. Progress globally on achieving the OECD’s objectives was slow initially because of the absence of a level playing field. However, the number of agreements negotiated and signed increased significantly after the G20 London Summit in April, 2009. Subsequent G20 Summits have continued to encourage jurisdictions to make progress in agreeing, implementing and abiding by the necessary international agreements.

4. In September 2009 the Global Forum on Transparency and Information Exchange for Tax Purposes, a body of which some one hundred jurisdictions are members, agreed a peer review process to assess compliance with the international standards. To oversee this process a Peer Review Group was set up chaired by France with four vice-chairs from India, Japan, Singapore and Jersey.

5. Jersey has maintained an active programme of negotiating tax information exchange agreements with OECD and G20 members. This has enhanced the Island’s international personality, and generally has helped to engender a more favourable view of the Island amongst the international community.

6. The latest position in respect of the programme of TIEA negotiations is attached as an Appendix to this report. A total of twenty-one tax information exchange agreements (TIEAs) and two double taxation agreements (DTAs) have now been signed, of which fifteen TIEAs and one DTA are in force.

7. 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 members. Jersey has now signed, initialled or completed negotiations with seventeen of the nineteen G20 countries (the other member of the G20 is the European Union).

8. Jersey has been actively involved with the process to assess compliance with the international standards. The peer review process is made up of two phases. Phase 1 is concerned with an assessment of the laws and regulations in place, and involves an assessment of whether these are sufficient to meet the international standards. All of the Global Forum members will be assessed in this respect over a three year period which commenced in March 2010. Phase 2 is concerned with assessing the effectiveness with which standards are being applied. Most countries will be assessed to Phase 2 as a second stage after the end of Phase 1. However, a number of countries, of which Jersey is one, volunteered to be assessed for both Phase 1 and Phase 2 within the first three year period. Jersey was assessed in 2010 by a team of assessors drawn from Denmark and Bermuda supported by the Global Forum Secretariat. The Jersey report is due to be published following its adoption at the Global Forum meeting at the end of May, 2011.

The Agreement with the Republic of Indonesia

8. The tax information exchange agreement entered into with the Republic of Indonesia is a continuation of the ongoing programme of signing TIEAs or DTAs with all OECD and G20 member countries. Indonesia is a member of the G20.

9. Attached as an appendix to this report is –

(a) The tax information exchange agreement, which is consistent with agreements signed previously with other countries.

The agreement provides for the exchange of information on tax matters on request. However that request has to be formulated in writing in the greatest detail possible. There can be no “fishing expeditions”. The agreement will come into force once the parties to the agreement have ratified it, and any necessary legislative steps have been taken;

(b) A Protocol between the Competent Authorities of the Government of Jersey and the Government of Indonesia concerning the interpretation or application of the agreement for the exchange of information relating to tax matters.

10. The policy of negotiating TIEAs or DTAs with OECD and G20 member countries is supported by the finance industry. The Agreement with Indonesia is seen by industry as an important step in the development of an economic relationship with Indonesia which is seen as a future source of business opportunities.

Procedure for Signing and Ratifying the TIEA

11. The Agreement with the Republic of Indonesia was signed by the Chief Minister on the 27th April, 2011 in accordance with the provisions of Article 18(2) of the States of Jersey Law 2005 and para 1.8.5 of the Strategic Plan 2006-2011 adopted by the States on 28 June 2006. The agreement is now being presented to the States for ratification following which it will be published, entered into the official record and Regulations will be made for the Agreement to enter into force when the domestic procedures of both parties have been completed.

12. The States on the 29 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 Republic of Indonesia and the relevant taxes will be presented to the States for adoption in due course subsequent to the ratification of the Agreement.

13. There are no implications for the financial or manpower resources of the States arising from the ratification and implementation of the agreement with the Republic of Indonesia.

4th May, 2011