Tax Information Exchange Agreement with Republic of India

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 6 February 2012:

Decision Reference: MD-C-2012-0020
Decision Summary Title :	Tax Information Exchange Agreement between the States of Jersey and the Government of the Republic of India		Date of Decision Summary:	31st January 2012
Decision Summary Author:	Project and 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 :	Agreement to be entered into with the Government of the Republic of India for the exchange of information and assistance in collection with respect to taxes		Date of Written Report:	23rd January 2012
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Agreement to be entered into with the Government of the Republic of India for the exchange of information and assistance in collection with respect to taxes.
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 and assistance in collection with respect to taxes between the States of Jersey and the Government of the Republic of India.
Reason(s) for Decision: The Agreement entered into with the Government of the Republic of India is a continuation of the ongoing programme of signing tax agreements with G20 countries. The Agreement with the Government of the Republic of India was signed by the Deputy Chief Minister, on the 2nd November 2011. 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.
Resource Implications: There are no resource implications.
Action required: The Greffier of the States is requested to arrange for the lodging ‘au Greffe’ of the Tax Information Exchange Agreement between the States of Jersey and the Government of the Republic of India for States debate at the earliest opportunity.
Signature:		Position: Senator I.J. Gorst Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Tax Information Exchange Agreement with Republic of India

DRAFT REPORT AND PROPOSITION

RATIFICATION OF A TAXATION AGREEMENT BETWEEN THE STATES OF JERSEY AND THE GOVERNMENT OF THE REPUBLIC OF INDIA

Proposition

The States are asked to decide whether they are of opinion –

To ratify the Agreement for the exchange of information and assistance in collection with respect to taxes between the States of Jersey and the Government of the Republic of India as set out in the Appendices to the Report of the Chief Minister dated 2nd November 2011.

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 27 tax information exchange agreements (TIEAs) and two double taxation agreements (DTAs) have now been signed, of which nineteen TIEAs and two DTAs 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 G20 countries. Jersey has 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 was published at the end of October, 2011. The review concluded that Jersey’s domestic laws provide a satisfactory framework for the exchange of relevant information. The Island fully met the Peer Review Group’s standard in six of the nine areas under review. Three areas related to legal implementation were assessed as being in place but with room for improvement. However, the assessors noted that the apparent gaps they identified had not prevented Jersey from engaging in effective information exchange. Nevertheless, changes are being made to the legislation to ensure that Jersey is fully compliant. The assessors said “overall, this review of Jersey identifies a legal and regulatory framework for the exchange of information which generally functions effectively to ensure that the required information will be available and accessible. Jersey’s practices to-date have demonstrated a responsive and cooperative approach.”

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 Government of the Republic of India

9. The Agreement entered into with the Government of the Republic of India is a continuation of the ongoing programme of signing tax agreements with G20 countries.

10. Attached as an appendix to this report is –

(a) the Agreement for the Exchange of Information and Assistance in the Collection of Taxes. The Agreement provides for the exchange of information on tax matters on request consistent with agreements signed previously with other jurisdictions and which the States have ratified. The Agreement also provides, in Article 8, for assistance in the collection of tax claims. This provision is consistent with similar provisions in the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters which the G20 in its communiqué following the Summit meeting in Cannes in November encouraged jurisdictions to join. Consideration of the Convention has been initiated on which the finance industry will be consulted;

(b) an Agreement between the competent authorities concerning the interpretation or application of the Agreement for the Exchange of Information and Assistance in Tax Collection with respect to Taxes. This Agreement provides that Article 8 of the Agreement referred to in (a) above will not be given effect until certain conditions have been met. That is, assistance in collection of tax claims, as envisaged under Article 8 of the Agreement and in accordance with the procedures to be agreed under Article 12(1) of the Agreement, shall be put into effect only at the earliest of the following dates:

(i) when the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters comes into force in respect of Jersey, subject to any reservations entered into on behalf of Jersey in connection therewith; or

(ii) when Jersey starts giving administrative assistance in collection of tax claims to any other country or jurisdiction.

11. It had been expected that an Agreement with India would have been signed in March, 2011 in Delhi. However, this was on the understanding obtained from the Indian authorities that the Article 8 provision would be included in other tax information exchange agreements to be signed by India with jurisdictions that Jersey saw as its competitors. This proved not to be the case, a matter that arose late in the day, and the decision was taken to withhold the signature until the arrangements for the implementation of Article 8, subject to certain conditions, were met. This is now the case.

12. The Agreement will come into force, subject to the arrangements agreed in respect of Article 8, once both parties to the Agreement have ratified it, and any necessary legislative steps have been taken.

Procedure for Signing and Ratifying the Agreement

13. The Agreement with the Government of the Republic of India was signed by the Deputy Chief Minister, on the 2nd November, 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 Deputy Chief Minister to sign on behalf of the Government of Jersey.

14. 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.

15. 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 Republic of India 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

16. There are no implications expected for the financial or manpower resources of the States arising from the ratification and implementation of the Agreement with the Government of the Republic of India.