Amendments to the Income Tax (Jersey) Law 1961, in relation to expenditure involving crime.

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A decision made (15/09/2008) regarding: Amendments to the Income Tax (Jersey) Law 1961, in relation to expenditure involving crime.

Decision Reference: MD-TR-2008-0095
Decision Summary Title:	Amendments to the Income Tax (Jersey) Law 1961 in relation to expenditure involving crime		Date of Decision Summary:	8th September, 2008
Decision Summary Author:	Malcolm Campbell Comptroller of Income Tax		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	Malcolm Campbell
Written Report Title:	Amendments to the Income Tax Law in relation to expenditure involving crime		Date of Written Report:	5th September, 2008
Written Report Author:	Malcolm Campbell Comptroller of Income Tax		Written Report : Public or Exempt?	Public
Subject: Amendments to the Income Tax (Jersey) Law 1961 in relation to expenditure involving crime
Decision(s): The Minister approved the amendments and the instruction of the Law Draftsman by the Comptroller of Income Tax
Reason(s) for Decision: To ensure that that no deduction is allowed for tax purposes for the payment the making of which constitutes a criminal offence in Jersey, or which, if made elsewhere, would constitute a criminal offence if made in Jersey, inclusive of a payment induced by blackmail or made for a corrupt purpose.
Resource Implications: There are no manpower or resource implications for the Income Tax Office.
Action required: The Comptroller of Income Tax to instruct the Law Draftsman
Signature:		Position: Senator T A Le Sueur, Minister for Treasury and Resources
Date Signed: 15th September, 2008		Date of Decision: 15th September, 2008

Amendments to the Income Tax (Jersey) Law 1961, in relation to expenditure involving crime.

AMENDMENTS TO INCOME TAX LAW IN RELATION TO EXPENDITURE INVOLVING CRIME

PURPOSE OF THE REPORT

The purpose of this report is to obtain the permission of the Minister for Treasury and Resources to agree to amendments to the Income Tax Law to prevent, in computing business profits, any deduction in respect of a payment the making of which constitutes a criminal offence in Jersey.

BACKGROUND

As part of a previous OECD Review of the Island, it was noted that the Income Tax Law contained no explicit restriction on the claiming of a deduction for corrupt payments when computing business profits for tax purposes.

3. COMMENTS

3.1 It is now necessary to make such an amendment so as to ensure Jersey does everything

possible to obtain a favourable report from the impending IMF review. It appears that a

statement of practice from the Comptroller of Income Tax, that would be posted on the

Income Tax web-site, is not sufficient.

The amendment would ensure that no deduction would be allowed, for any tax purposes, for

any payment the making of which constitutes a criminal offence in Jersey, or which, if

made elsewhere, would constitute a criminal offence if made in Jersey, inclusive of a

payment induced by blackmail or made for a corrupt purpose.

4. RECOMMENDATION

4.1 That the Minister agree to the changes outlined above and that the Comptroller instruct the

Law Draftsman accordingly.

INCOME TAX

5 September 2008