Agreements for the Exchange of Information relating to Tax Matters between the Nordic countries and the States of Jersey.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 (06/02/2008) regarding: Agreements for the Exchange of Information relating to Tax Matters between the Nordic countries and the States of Jersey.

Decision Reference: MD-C-2009-0016
Decision Summary Title :	Agreements for the Exchange of Information relating to Tax Matters between the Nordic countries and the States of Jersey		Date of Decision Summary:	2nd February 2009
Decision Summary Author:	Kate Power Policy and 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 :	Ratification of the Agreements for the Exchange of Information Relating to Tax Matters Between The States of Jersey and the Nordic Countries (Denmark, The Faroes, Finland, Greenland, Iceland, Norway and Sweden)		Date of Written Report:	2nd February 2009
Written Report Author:	Colin Powell Adviser-International Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Agreements for the Exchange of Information relating to Tax Matters between the Nordic countries and the States of Jersey
Decision(s): The Chief Minister, acting on the recommendation of the Council of Ministers, agreed to lodge 'au Greffe' the report and proposition inviting the States to ratify the Agreements for the Exchange of Information Relating to Tax Matters between the Nordic Countries (Denmark, The Faroes, Finland, Greenland, Iceland, Norway and Sweden) and the States of Jersey and also to lodge the associated Draft Taxation (Exchange of Information with Third Countries) (Amendment) (Jersey) Regulations 200-.
Reason(s) for Decision: 1. The negotiations with the Nordic countries produced for each country agreement on the following, attached as an Appendix: a tax information exchange agreement which is consistent with the agreements signed previously with other countries such as the United States of America in 2002, the Kingdom of the Netherlands in 2007 and the Federal Republic of Germany in 2008. The agreement provides for the exchange of information on tax matters on request, however that request has to be formulated in writing with the greatest detail possible. There can be no “fishing expedition”. The agreements only come into force once the States have ratified them and have approved the necessary Regulations, and the other countries concerned have completed their own domestic procedures; an agreement for the avoidance of double taxation of individuals in respect of income from employment, payments received by students for maintenance, education and training; an agreement for the avoidance of double taxation in respect of enterprises operating ships or aircraft in international traffic; an agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises; a political declaration which – recognises Jersey’s commitment to comply with international standards and to participate in international efforts to combat money laundering, terrorist financing, financial and other crimes including fiscal crime; welcomes Jersey as a member of the community of nations committed to international cooperation and full and effective information exchange on tax matters, and wishes to assure the government of Jersey that Jersey will be fully and equally treated as such; provides for a continued dialogue to examine what measures could be adopted to further enhance and broaden the political and economic relationship including the further alleviation of elements of double taxation, discrimination and other undesired tax barriers and the further extension of the arrangements for information exchange. The negotiation of the agreements has helped to establish a good relationship with the Nordic countries and has helped improve their understanding of and influence favourably their attitude towards the Island. The agreements are considered to enhance the Island’s international personality and generally to lead to a more favourable response to the Island on a wide range of market access and other economic/political issues.
Resource Implications: There are no implications for the financial or manpower resources of the States arising from the ratification and implementation of the agreements with the Nordic countries.
Action required: Request the Greffier of the States to lodge ‘au Greffe’ the Agreements for the Exchange of Information Relating to Tax Matters between the Nordic Countries (Denmark, The Faroes, Finland, Greenland, Iceland, Norway and Sweden) and the States of Jersey, and the associated draft Regulations, as soon as possible.
Signature:		Position: Senator T. Le Sueur, Chief Minister
Date Signed: 6.02.09		Date of Decision (If different from Date Signed):

Agreements for the Exchange of Information relating to Tax Matters between the Nordic countries and the States of Jersey.

REPORT AND PROPOSITION

RATIFICATION OF THE AGREEMENTS FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS BETWEEN THE STATES OF JERSEY AND THE NORDIC COUNTRIES (DENMARK, THE FAROES, FINLAND, GREENLAND, ICELAND, NORWAY AND SWEDEN)

PROPOSITION

The States are asked to decide whether they are of opinion –

To ratify the agreements for the exchange of information relating to tax matters between the States of Jersey and the Nordic countries of Denmark, the Faroes, Finland, Greenland, Iceland, Norway and Sweden as set out in the Appendix to the report of the Chief Minister dated .

Chief Minister

REPORT

Agreements to be entered into with Denmark, the Faroes, Finland, Greenland, Iceland, Norway and Sweden for the exchange of information relating to tax matters.

1. The States are asked to ratify the signed agreements to be entered into with Denmark, the Faroes, Finland, Greenland, Iceland, Norway and Sweden 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 with each of the OECD Member States.

3. The Council of Ministers current negotiating strategy in respect of tax information exchange agreements is –

to build up good political and economic relationships with individual countries, particularly those in the European Union;
to obtain general support for the Island where matters affecting the Island are being considered within international fora;
to obtain the removal of key barriers to market access, such as black lists;
to recognise that all the Island’s wishes may not be achieved to the outset, and establish a platform from which to build in securing further benefits in the future;
to press for action to be taken by the OECD Member States against the non-committed/non-cooperative jurisdictions who may otherwise be gaining advantage from that position.

4. The Council of Ministers have also seen the negotiation of tax information exchange agreements as one of balance between –

the impact on business arising from the perception that Jersey is ahead of its competitors on transparency;
the impact on business of negative action taken by OECD/EU Member States against non-cooperative jurisdictions, if they should decide that Jersey is in that category;
the impact on business of the positive action taken by OECD/EU Member States when they recognise Jersey as a cooperative jurisdiction.

5. The action the Island has taken in signing tax information exchange agreements has been recognised by the international community. On October 21st 2008 at a Conference on the Fight against International Tax Evasion and Avoidance: Improving Transparency and Stepping Up the Exchange of Information on Tax Matters, held in Paris, the Secretary General of the OECD, commented favourably on the action taken by Jersey in negotiating tax information exchange agreements and stated that what is now required is “a clear political recognition being given to those offshore financial centres that have made progress”. In the Summary of Conclusions of the Paris Conference it is stated that the participating countries “recognise the efforts made by certain jurisdictions [such as Jersey] that have set out a new direction for their financial centres and have signed tax information exchange agreements, which constitute effective instruments of fighting international tax fraud and evasion.

6. Jeffrey Owens, the Head of the OECD Centre for Tax Policy and Administration, said at the signing of the tax information exchange agreements with the Nordic countries in Helsinki on 28th October that “we at the OECD recognise the importance of the progress Jersey has made in signing TIEAs, and in receiving clear political endorsement from OECD member countries. To show that the choice Jersey has made is the right one we recognise the need for firm action to be taken with regard to those jurisdictions that are not showing the same commitment to tax information exchange”. The G 20 Summit in Washington held on 15th November 2008 also issued a declaration which called upon national and regional authorities to implement national and international measures and protect the global financial system from uncooperative and non-transparent jurisdictions that pose risks of illicit financial activity.

7. The procedure adopted in respect of individual agreements is for industry to be consulted and for the views of industry to be taken into account by the Council of Ministers in deciding whether to support the signing of a tax information exchange agreement. If the Council of Ministers decide that it would be in the Island’s best interests for an agreement to be signed, both parties to the agreement then exchange signed agreements which allows both to start their ratification procedures contemporaneously. Agreements are signed by the Chief Minister in accordance with the provisions of Article 18(2) of the States of Jersey Law 2005 and paragraph 1.8.5 of the Strategic Plan 2006-2011 adopted by the States on 28 June 2006. Subsequent to the signing by the Chief Minister, agreements are presented to the States for ratification, are published, entered into the official record and regulations are made for the agreements to enter into force when the domestic procedures of the other party also have been completed.

8. The States on 29th January 2008 adopted the Taxation (Exchange of Information with Third Countries) (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 need to be amended to include in the Schedule the jurisdiction and taxes concerned. The necessary Regulations to provide for the inclusion in the Schedule of the seven Nordic countries and the relevant taxes are being presented to the States for adoption subsequent to the ratification of the Agreements for the exchange of information relating to tax matters being entered into with the countries concerned (P /2008).

9. The Agreements do not come into force until both of the parties concerned have completed their own domestic procedures. The date when an agreement is to come into force is included in a forthcoming Schedule attached to the Regulations.

Agreements with the Nordic countries

10. The negotiations with the Nordic countries produced agreement on the following, attached as an Appendix to this report.

a tax information exchange agreement which is consistent with the agreements signed previously with other countries such as the United States of America in 2002, the Kingdom of the Netherlands in 2007 and the Federal Republic of Germany in 2008.

The agreement provides for the exchange of information on tax matters on request, however that request has to be formulated in writing with the greatest detail possible. There can be no “fishing expedition”. The agreements only come into force once the States have ratified them and have approved the necessary Regulations, and the other countries concerned have completed their own domestic procedures;

an agreement for the avoidance of double taxation of individuals in respect of income from employment, payments received by students for maintenance, education and training;

an agreement for the avoidance of double taxation in respect of enterprises operating ships or aircraft in international traffic;

an agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises;

a political declaration which –

recognises Jersey’s commitment to comply with international standards and to participate in international efforts to combat money laundering, terrorist financing, financial and other crimes including fiscal crime;
welcomes Jersey as a member of the community of nations committed to international cooperation and full and effective information exchange on tax matters, and wishes to assure the government of Jersey that Jersey will be fully and equally treated as such;
provides for a continued dialogue to examine what measures could be adopted to further enhance and broaden the political and economic relationship including the further alleviation of elements of double taxation, discrimination and other undesired tax barriers and the further extension of the arrangements for information exchange.

The negotiation of the agreements has helped to establish a good relationship with the Nordic countries and has helped improve their understanding of and influence favourably their attitude towards the Island. The agreements are considered to enhance the Island’s international personality and generally to lead to a more favourable response to the Island on a wide range of market access and other economic/political issues.

There are no implications for the financial or manpower resources of the States arising from the ratification and implementation of the agreements with the Nordic countries.

1 December 2008