EU Taxation of Savings Income Agreements: Replacement of the Retention Tax by Automatic Exchange of Information

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A decision made 7 November 2013:

Decision Reference: MD-C-2013-0131
Decision Summary Title :	Proposition for the move to Automatic Exchange of Information under the EU Savings Tax Directive		Date of Decision Summary:	8th November 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 :	Proposition for the move to Automatic Exchange of Information under the EU Savings Tax Directive		Date of Written Report:	4th November 2013
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Proposition for the move to Automatic Exchange of Information under the EU Savings Tax Directive
Decision(s): The Minister agreed to lodge ‘au Greffe’ the proposition for the move to Automatic Exchange of Information (AEOI) under the EU Savings Tax Directive for debate by the States at the earliest opportunity.
Reason(s) for Decision: Jersey has always stated that once it is clear that the EU is moving to full AEOI it would consider whether to make a move ahead of when it would have no alternative but to do so, which is expected to occur in 2015. It is, therefore, proposed that the Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005 should be amended to enable all those wishing to do so to move to AEOI from the date the amended Regulations are made and to make it mandatory that this move be made no later than 1st January 2015.
Resource Implications: There are no manpower implications for the States arising from the making of the amended Regulations. However, under the terms of the Agreements, Jersey retains 25% of the retention tax proceeds before these are passed to the individual Member States. With the low interest rates prevailing, and the move to voluntary disclosure, the revenue from the retention tax is now lower than in the past, notwithstanding the higher rate of 35%. However, currently the States are benefitting from an income of some £2 million per annum and this will be foregone with the replacement of the retention tax by AEOI.
Action required: The Greffier of the States to be requested to lodge ‘au Greffe’ the proposition for the move to Automatic Exchange of Information under the EU Savings Tax Directive for debate by the States at the earliest opportunity.
Signature:		Position: Minister for External Relations
Date Signed:		Date of Decision (If different from Date Signed):