Goods and Services Tax

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A decision made (28/01/2008) regarding: Goods and Services Tax - Amendments.

Decision Reference: MTR-2008-0012
Decision Summary Title:	Goods and Services Tax (Amendment) (Jersey) Law 200-		Date of Decision Summary:	25th January, 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-		Date of Written Report:	25th January, 2008
Written Report Author:	Steve Lowthorpe – Director GST (Income Tax)		Written Report : Public or Exempt?	Public
Subject: The GST legislation – a range of amendments to the GST Law
Decision(s): The Minister approved the draft Goods and Services Tax (Amendment) (Jersey) Law 200- and asked that they be lodged ‘au greffe’ on 28th January 2008, for States debate on 11th March 2008. The Minister also signed the Human Rights Statement of Compatibility confirming that the provisions of the Draft Law complied with the European Convention on Human Rights.
Reason(s) for Decision: To provide a legal framework that supports agreed policy treatment, improves interpretation and at the same time makes some corrections.
Resource Implications: No further resource implications, over and above those originally detailed, to implement the GST Legislation.
Action required: Send report and amendment law to the Publications Editor at the Greffe.
Signature:		Position: Senator T A Le Sueur, Minister for Treasury & Resources
Date Signed: 28th January 2008		Date of Decision: 28th January 2008

Goods and Services Tax - Amendments.

STATES TREASURY ITEM NO:

REPORT

TREASURY AND RESOURCES MINISTER

GOODS AND SERVICES TAX (amendment) (jERSEY) law 200-

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 are scheduled for States debate on 26th February.

Part 12 of the law proposed a partial refund scheme (under Articles 61 & 62) which is now being replaced by an extended graduated flat rate scheme for service providers (described in the ISE Regulations). As a result these Articles are to be deleted and the following linked changes will also be made under the amendment law:-

Place of residence
Status of ISE – not a taxable person for GST purposes
Payment on an annual basis
Provision for a partnership to be included in a group registration

At the same time as the above FSI linked changes are being made the opportunity has been taken to make some additional amendments in the interests of clarification / interpretation. These are based on feedback mainly from professionals and the business community. The amendments providing clarification are as follows:-

Retail schemes - issue of tax invoices
Rounding
Treatment of imports – allows Agent of the Impots to issue regulations

The remaining amendments are corrections to the law.

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.

28 January, 2008