Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005: Amendment: Law Drafting Instructions

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 13 September 2013:

Decision Reference: MD-C-2013-0105
Decision Summary Title :	Law Drafting Instructions relating to EU Savings Tax Agreements - Change from Retention Tax to Automatic Exchange of Information		Date of Decision Summary:	13th September 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 :	EU Savings Tax Agreements - Change from Retention Tax to Automatic Exchange of Information		Date of Written Report:	13th September 2013
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Law Drafting Instructions relating to EU Savings Tax Agreements - Change from Retention Tax to Automatic Exchange of Information
Decision(s): The Chief Minister decided to instruct the Law Draftsman’s Office to prepare draft legislation amending the Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005 to allow for the Automatic Exchange of Information (AEOI) in relation to EU Savings Tax Agreements. Paying agents will be offered the option of moving to AEOI from 1st January 2014, whilst it will become mandatory from 1st January 2015.
Reason(s) for Decision: With the decisions to negotiate intergovernmental agreements with the US and UK, to join in the EU pilot project on enhancing exchange of information, and to accept the extension of the UK’s ratification of the OECD/CoE Multilateral Convention on Administrative Assistance on Tax Matters, all of which include provision for Automatic Exchange of Information (AEOI), it is considered appropriate to review the present retention tax option for the EU Savings Tax agreements . Furthermore, Jersey has always made it clear that the timing of this move would be influenced by when it was known, as is now the case, that all EU Member States will be adopting AEOI for the Savings Tax Directive. Following consultation with the local finance industry, it has been decided that a phased approach will be employed to change from the retention tax to AEOI under the Savings Tax Agreements. The amendment to the existing Regulation will allow those wishing to do so to move to AEOI from the 1st January 2014 and to make it mandatory that the change be made no later than the 1st January 2015.
Resource Implications: There are no resource or manpower implications
Action required: Law Draftsman to draft necessary amendment to the Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005 in preparation for the Chief Minister to lodge au Greffe.
Signature:		Position: Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005: Amendment: Law Drafting Instructions

EU Savings Tax Agreements - Change from Retention Tax to Automatic Exchange of Information (AEOI)

With the decisions to negotiate intergovernmental agreements with the US and UK, to join in the EU pilot project on enhancing exchange of information, and to accept the extension of the UK’s ratification of the OECD/CoE Multilateral Convention on Administrative Assistance on Tax Matters, all of which include provision for AEOI, it is considered appropriate to review the present retention tax option for the EU Savings Tax agreements

The policy adopted to-date has been to hold back from replacing the retention tax with AEOI until the EU got its own house in order and Austria and Luxembourg decided to make the move to AEOI. Once the latter occurred the transitional arrangements under the EU Savings Tax Directive would come to an end and Jersey would have no choice but to move to AEOI under the terms of the agreements entered into with all 28 Member States. However Jersey has always made it clear that once it is clear that the EU is moving to full AEOI, as is now the case, it would consider whether to make a move ahead of when it would have no alternative but to do so.

Of relevance for the decision to be taken on the timing of a changeover to AEOI is the declared wish of those banks that have offices in all three CDs to move as early as possible so that they can coordinate their systems, Guernsey and the Isle of Man having made the move to AEOI some two years ago. Also of relevance for the timing is that with the increase in the retention tax rate to 35% in July 2012 the majority of those covered by the agreements have already opted for the voluntary disclosure option in the agreements.

The finance industry was asked for its views on the timing of Jersey moving to AEOI -

Most if not all of the High Street banks would wish to move to AEOI as soon as possible and are happy to move with effect from 1st January 2014;
Some paying agents while wishing to move quickly would like more time to implement new systems and therefore see advantage in making the move from 1st July 2014;
Some paying agents would like to have even more time to implement systems and therefore favour 1st January 2015.

The decision reached as a result of the foregoing is that, provision should be made through an amendment to the existing Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005 to enable those wishing to do so to move to AEOI from the 1st January 2014 and to make it mandatory that the change be made no later than the 1st January 2015.