Taxation (Double Taxation) (Jersey) Regulations 2010: Law drafting instructions

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.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 13 July 2015:

Decision Reference: MD-ER-2015-0037
Decision Summary Title :	To prepare an Amendment to the Taxation (Double Taxation)(Jersey) Regulations 2010		Date of Decision Summary:	8 July 2015
Decision Summary Author:	External Relations		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	To prepare an amendment to the Taxation(Double Taxation) (Jersey) Regulations 2010		Date of Written Report:	8th July 2015
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt?	Public
Subject: To request the Law Draftsman to prepare an Amendment to the Taxation(Double Taxation)(Jersey) Regulations 2010
Subject: To request the Law Draftsman to prepare an Amendment to the Taxation(Double Taxation)(Jersey) Regulations 2010
Reason(s) for Decision: The Minister for External Relations approved proposals for the Law Draftsman to prepare an Amendment to the Taxation(Double Taxation)(Jersey) Regulations 2010 to include in the Schedule the Double Taxation Agreement with the Republic of Rwanda
Resource Implications: There are no financial or manpower implications arising from the law drafting instructions.
Action required: The Minister for External Relations requested that the Adviser – International Affairs submit drafting instructions to the Law Draftsman’s Office.
Signature:		Position: Minister for External Relations
Date Signed: 13 July 2015		Date of Decision (If different from Date Signed):

Taxation (Double Taxation) (Jersey) Regulations 2010: Law drafting instructions

Ratification of the Convention between Jersey and the Republic of Rwanda for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income..

PROPOSITION

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

To ratify the Agreement between Jersey and the Republic of Rwanda for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, as set out in the appendix to the report of the Minister for External Relations dated 7th July 2015.

MINISTER FOR EXTERNAL RELATIONS

REPORT

Background

Africa has been identified as an area with good business opportunities for Jersey as an international finance centre which opportunities if taken advantage of would be of

benefit to the developing countries.

In November 2014, Jersey Finance launched the ‘Value to Africa’ report, at Chatham House, which was commissioned to look at the role international financial centres could play in the growth of developing countries. The report, conducted by independent research organisation, Capital Economics, found that, while Africa is one of the fastest growing regions globally, to sustain that growth it needs to invest US $85 trn in infrastructure by 2040. This cannot be generated locally or through international aid, with the research paper estimating a shortfall of US $11.4 trn in investment, US $6.1 trn of which will need to come from outside the continent.

Great importance is attached to the Agreement with Rwanda as the first such agreement with an African country, and one that will support inward investment into Rwanda and further enhance the close economic and political relationships that already exist between Jersey and Rwanda. These relationships were reinforced by the visit to Rwanda in June 2015 by the Assistant Chief Minister, Senator Philip Ozouf, and technical assistance has been offered to Rwanda in the pursuit of their plans to develop their economy.

Approaches have been made to other African countries to initiate negotiations on entering into similar agreements and it is hoped that the agreement with Rwanda will encourage the other countries to progress negotiations . It is also intended that, alongside the Double Taxation Agreements(DTA), Bilateral Investment Treaties (BIT) will also be negotiated. Support has also been extended through assistance with asset recovery and through the enactment of legislation on Vulture Funds.

The combination of a DTA and a BIT will support inward investment thereby linking the role of Jersey as an international finance centre with the investment needs of the developing countries. The role that Jersey can play in this respect is also reflected in the presence in the island of over 20 mining and natural resources companies with interests in Africa .

In February 2002, Jersey entered into a political commitment to support the OECD tax initiative on transparency and information exchange through the negotiation of tax information exchange agreements to an agreed international standard. Successive G20 summits have encouraged jurisdictions to make progress in agreeing, implementing and abiding by the necessary international agreements for information exchange. The international tax information exchange standard can be met through either a Tax Information Exchange Agreement (TIEA) or a Double Tax Agreement/Convention (DTA/DTC). The advantage of a DTA/DTC is that it offers benefits to individuals and the business community through the avoidance of double taxation or reduced rates of withholding tax, in addition to providing for exchange of information to the international standard.

The latest position in respect of the programme of negotiating tax agreements is attached as an appendix to this report. A total of thirty six TIEAs and nine DTAs have now been signed of which thirty three TIEAs and eight DTAs are in force. Almost without exception 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.

Jersey is party to the Peer Review process of assessment of compliance with the international standards, and has been assessed as largely compliant, a rating common to the UK, the USA, and Germany among others.

The Agreement with the Republic of Rwanda

The Double Taxation Agreement entered into with the Republic of Rwanda (“the Agreement”) is to the international standard set by the OECD.

The Agreement is attached as an appendix to this report. The Agreement is in line with the OECD Model Tax Convention and provides for the avoidance of double taxation to facilitate exchange of goods and services and movement of capital, technology and people. The Agreement also makes provision for information exchange to the agreed international standard.

Procedure for signing and ratifying the Convention

The Agreement was signed in London at the Jersey Office on the 26th June 2015 by the Minister for External Relations 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 has authorised the Chief Minister in concurrence with the Minister for External Relations to sign on behalf of the Government of Jersey.

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

The States on the 15th June 2010 adopted the Taxation (Double Taxation) (Jersey) Regulations 2010. The Schedule to these Regulations lists the countries with whom Double Tax Agreements have been entered into. The necessary Regulations to provide for the inclusion in the Schedule of the Agreement with the Republic of Rwanda will be presented to the States for adoption immediately following the adoption of the ratification proposition .

Financial and manpower implications

There are no implications expected for the financial and manpower resources of the States arising from the ratification and implementation of the Agreement.

7th July 2015