21 October 2016
The Chief Minister, Senator Ian Gorst, has signed an agreement for Jersey to exchange tax information as part of the Organisation for Economic Co-operation and Development's Base Erosion and Profit Shifting (BEPS) programme. The signing was at the OECD in Paris, in the presence of the Secretary General of the OECD, Angel Gurría.
The Multilateral Competent Authority Agreement (MCAA) provides for automatic exchange of information in accordance with country by country reporting by large multinational enterprises. The purpose of BEPS is to ensure profits are taxed where the economic activity that generates the profits is carried out, and where value is created.
It will help governments to prevent tax planning strategies that artificially shift profits to low or no-tax locations where there is little or no economic activity. This fits well with Jersey’s longstanding policy of requiring regulated financial institutions, such as banks, to have a real physical presence and to be of substance.
Jersey became a BEPS Associate on 16 June 2016 and is a member of the BEPS Inclusive Framework, which brings together 85 countries and jurisdictions – including G20 and EU Member States, as well as a large number of developing countries. Jersey’s government has published new regulations on country-by-country reporting by large multinational enterprises (MNEs), which will be presented to the States Assembly for approval before the end of the year. The draft regulations, which are in line with the OECD’s international standards, will impose a reporting requirement on MNEs with an annual consolidated group revenue of €750m or more for accounting periods on or after 1 January 2016.
Senator Gorst said "The signing of the agreement is further evidence of Jersey's commitment to the BEPS programme and to our continued compliance with the international standards set by the OECD, and other relevant international bodies, on transparency and exchange of information for tax purposes."
Before the signing Secretary General Gurría confirmed to Senator Gorst that the OECD recognised Jersey's high level of compliance with international standards set by the OECD. Particular mention was made of Jersey's contribution to the work of the Global Forum on exchange of information on request and automatically, currently as a vice chair of the Automatic Exchange of Information Working Group, and to Jersey’s leading position on transparency of beneficial ownership.
The meeting with Secretary General Gurría was organised for the governments of the three Crown Dependencies: the delegation from the Isle of Man was led by Chief Minister Howard Quayle MHK; Guernsey was represented by Deputy Lyndon Trott, Vice President of Guernsey’s Policy and Resources Committee. After the signing ceremony at the OECD, the delegations from Jersey, Guernsey and the Isle of Man attended a meeting at the British Embassy in Paris, hosted by the Head of Mission.