Goods and Services Tax (Jersey) Law 200- Amendments.

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A decision made (05/04/2007) regarding: Goods and Services Tax (Jersey) Law 200- Amendments.

Subject:	Goods and Services Tax (Jersey) Law 200- Amendments
Decision Reference:	MD-TR-2007-0042	Exempt clause(s):		N/A
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:		SL/2/11/04/07
Written Report – Title	Goods and Services Tax (Jersey) Law 200- Amendments	Written report - author		Steve Lowthorpe – Director, GST
Decision(s): The Minister agreed to direct the Director, GST to instruct the Law Draftsman to make the following amendments to the Goods and Services Tax (Jersey) Law 200- and to lodge these amendments au Greffe: To replace the term Finance Vehicle with International Services Entities (ISE) as being a closer reflection of the reality of the Finance Industry. To remove any uncertainty regarding the status and treatment of Finance Vehicles / ISE under Part 12 (they are not within the definition of “taxable person”). To withdraw the partial refund scheme for banks on the basis that banks will be eligible for inclusion as an ISE under the flat rate scheme proposed under Articles 57 to 60.
Reason(s) for decision: Following submissions from Jersey Finance Limited, as summarised in the attached Report, the Minister is recommended to direct the Director, GST to instruct the Law Draftsman to make the appropriate amendments to the Goods and Services Tax (Jersey) Law 200- and lodge
Action required: Officers to instruct the Law Draftsman to make the appropriate amendments and to lodge these revisions to the Goods and Services Tax (Jersey) Law 200- au Greffe.
Signature: (Minister/ Assistant Minister)			Date of Decision: 5 April 2007

Goods and Services Tax (Jersey) Law 200- Amendments.

TREASURY AND RESOURCES MINISTER

Goods and Services Tax (Jersey) Law 200- Amendments

1. Purpose of Report

The purpose of this Report is to gain Ministerial approval for the lodging of

amendments to the Goods and Services Tax (Jersey) Law 200-.

2. Background

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.

3. Comments

In the light of this decision, and following extensive consultation during 2006 with the business community and the wider public, law drafting on the above law has now concluded and the final draft of the law was lodged au Greffe for debate by the Assembly on 17th April 2007.

4. Amendments

Following subsequent representations from Jersey Finance Limited (JFL), the

Minister is advised that the following amendments to the Law should be made:

To replace the term Finance Vehicle with International Services Entities (ISE) as being a closer reflection of the reality of the Finance Industry.

To withdraw the partial refund scheme for banks on the basis that banks will be eligible for inclusion as an ISE under the flat rate scheme proposed under Articles 57 to 60.

To remove any uncertainty regarding the status and treatment of Finance Vehicles / ISE under Part 12 (they are not within the definition of “taxable person”).

5. Reasons for the Amendments

As a result of recent detailed analysis of the law undertaken in conjunction with Jersey Finance Limited it is now considered that the partial refund scheme for banks (as proposed in Part 12) could result in significant complexity for the finance industry, requiring the need for additional administrative (non value adding) resources for industry, as well as the additional government resources necessary to administer the complexity.

Furthermore, complex law could potentially undermine the simplicity of Jersey based

structures and client advice and may damage the competitiveness of the finance

industry.

The proposed amendment will address the first two points and allow a more

measured first step that can be assessed for effectiveness within a year. In particular

the proposed approach should provide greater certainty regarding the ability to raise

the targeted £5m - £10m, whilst not ruling out the ability to apply greater complexity

if found to be necessary in due course.

In addition to provide greater certainty of treatment the law has been amended to clarify the status of a Finance Vehicle/ ISE. Any such body listed under Part 12 would not be considered a taxable person for GST purposes.

6. Recommendation

That the Minister approves the lodging au Greffe of the amendments to the Goods

and Service s Tax ( Jersey ) Law 200- outlined above and agrees to direct the

Director, GST to instruct the Law Draftsman to make the necessary changes and

lodge these amendments au Greffe.

Financial and Manpower Implications

There are no financial or manpower implications resulting from these amendments.

States Treasury For Ministerial Decision meeting on 11th April 2007