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STATES TREASURY ITEM NO:
REPORT
TREASURY AND RESOURCES MINISTER
GOODS AND SERVICES TAX (INTERNATIONAL SERVICES ENTITIES) (jERSEY) rEGULATIONS 200-(P.10/2008): 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 were 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
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