Agreement for the Exchange of Information Relating to Tax Matters between Jersey and the Czech Republic: Ratification

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A decision made on 9 August 2011:

Decision Reference: MD-C-2011-0100
Decision Summary Title :	Agreement for the Exchange of Information relating to Tax Matters between the Government of Jersey and the Government of the Czech Republic		Date of Decision Summary:	9th August 2011
Decision Summary Author:	Project and Research Officer		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Ratification of the Agreement for the Exchange of Information relating to Tax Matters between the Government of Jersey and the Government of the Czech Republic		Date of Written Report:	21st July 2011
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt?	Public
Subject: Ratification of the Agreement for the Exchange of Information relating to Tax Matters between the Government of Jersey and the Government of the Czech Republic.
Decision(s): The Chief Minister agreed to lodge ‘au Greffe’ the Report and Proposition inviting the States to ratify the Agreement for the Exchange of Information relating to Tax Matters between the Government of Jersey and the Government of the Czech Republic.
Reason(s) for Decision: The Tax Information Exchange Agreement entered into with the Czech Republic is a continuation of the ongoing programme of signing TIEAs or DTAs with all OECD and G20 member countries. The programme is serving to enhance the Island’s international personality and generally is helping to engender a more favourable view of the Island amongst the international community. The agreement will come into force once the parties to the agreement have ratified it, and any necessary legislative steps have been taken.
Resource Implications: There are no resource implications arising from the ratification of the Taxation Exchange Agreement with the Government of the Czech Republic.
Action required: The Greffier of the States is requested to lodge ‘au Greffe’ the Tax Information Exchange Agreement between the States of Jersey and the Government of the Czech Republic at the earliest possible date.
Signature:		Position: Senator T.A. Le Sueur, Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

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Agreement for the Exchange of Information Relating to Tax Matters between Jersey and the Czech Republic: Ratification

21st July, 2011

Agenda Item: B4(a)

Title of Report: Ratification of the Agreement for the Exchange of Information Relating to Tax Matters between the Government of Jersey and the Government of the Czech Republic

Introduction:

The Council of Ministers are asked to agree to present the following report to the States asking them to ratify the signed agreement to be entered into with the Czech Republic for the exchange of information on tax matters.

Draft Report:

Agreement to be entered into with the Czech Republic for the exchange of information on tax matters.

1. The States are asked to ratify the signed Agreement to be entered into with the Czech Republic for the exchange of information on 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 to an agreed international standard.

3. In September 2009, the Global Forum on Transparency and Information Exchange for Tax Purposes, a body of which more than one hundred jurisdictions are members, agreed a peer review process to assess compliance with the international standard. To oversee this process, a Peer Review Group was set up chaired by France, with four vice-chairs from India, Japan, Singapore and Jersey.

4. Successive G20 Summits have encouraged jurisdictions to make progress in agreeing, implementing and abiding by the necessary international agreements for information exchange. In response Jersey has maintained an active programme of negotiating agreements with EU, OECD and G20 member jurisdictions. This has served to enhance the Island’s international personality, and generally has helped to engender a more favourable view of the Island amongst the international community.

5. The latest position in respect of the programme of negotiating tax information exchange agreements is attached as an appendix to this report. A total of 23 tax information exchange agreements (TIEAs) and two double taxation agreements (DTAs) have now been signed, of which fifteen TIEAs and one DTA are in force. The delay in bringing agreements into force is due to the length of time taken by the other parties to the agreements to complete their domestic procedures for the ratification of the agreements.

6. As a Vice-Chair of the Global Forum Peer Review Group, Jersey has been determined to lead by example, and has attached particular importance to entering into agreements on tax information exchange with EU and G20 members. Jersey has signed, initialled or completed the negotiation of an agreement with fifteen EU Member States. Negotiations are actively underway with six more, and the remaining six have been invited to commence negotiations. Jersey has also now signed, initialled or completed negotiation with seventeen of the nineteen G20 countries (the other member of the G20 is the European Union).

7. Jersey has been party to the peer review process to assess compliance with international standards, and a report on the assessment of Jersey is due to be published shortly.

8. The policy of negotiating TIEAs or DTAs is supported by the finance industry. The preference of government and the industry is for a DTA but the majority of jurisdictions with whom negotiations have been undertaken have not been prepared to consider a DTA on the grounds that they believe they would derive little if any benefit from such an agreement.

The Agreement with the Czech Republic

9. The Tax Information Exchange Agreement entered into with the Czech Republic is a continuation of the ongoing programme of signing TIEAs or DTAs with EU Member countries.

10. Attached as an appendix to this report is –

(a) the Tax Information Exchange Agreement, which is consistent with agreements signed previously with other countries and which the States have ratified. The Agreement provides for the exchange of information on tax matters on request. The Agreement will come into force once both parties to the Agreement have ratified it, and any necessary legislative steps have been taken;

(b) a Protocol is attached as an annex to the Agreement concerning the interpretation or application of the Agreement particularly in respect of the allocation of costs;

Procedure for Signing and Ratifying the TIEA

11. The Agreement with the Czech Republic was signed by the Assistant Chief Minister, UK and International Relations, on the 12th July, 2011 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 the 28th June, 2006. The Council of Ministers authorised the Assistant Chief Minister to sign on behalf of the Government of Jersey.

12. The Agreement is now being presented to the States for ratification, following which it will be published, and entered into the official record. In due course regulations will be made for the Agreement to enter into force when the domestic procedures of both parties have been completed.

13. The States, on the 29th January 2008, adopted The Taxation (Exchange of Information with Third Countries (Jersey) 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 are amended to include in the schedule the jurisdiction and the taxes concerned. The necessary regulations to provide for the inclusion in the schedule of the Czech Republic and the relevant taxes will be presented to the States for adoption on due course subsequent to the ratification of the Agreement.

Financial and Manpower Implications

14. There are no implications for the financial or manpower resources of the States arising from the ratification and implementation of the Agreement with the Czech Republic.

Recommendation:

That the Council of Ministers agree to present the required report and proposition to the States asking them to ratify the signed agreement to be entered into with the Czech Republic.

Colin Powell

Adviser – International Affairs

14th July, 2011