Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008: Amendment: Republic of Korea: 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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 7 August 2015:

Decision Reference: MD-ER-2015-0038
Decision Summary Title :	To prepare an Amendment to the Taxation (Exchange of Information with Third Countries)(Jersey) Regulations 2008		Date of Decision Summary:	30 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(Exchange of Information) (Jersey) Regulations 2008		Date of Written Report:	30 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(Exchange of Information with Third Countries)(Jersey) Regulations 2008
Decision(s): Request to the Law Draftsman to prepare an Amendment to the Taxation(Exchange of Information with Third Countries)(Jersey) Regulations 2008
Reason(s) for Decision: The Minister for External Relations approved proposals for the Law Draftsman to prepare an Amendment to the Taxation(Exchange of Information with Third Countries)(Jersey) Regulations 2008 to include in the Schedule the Tax Information Exchange Agreement with the Republic of Korea
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: Chief Minister
Date Signed: 7 August 2015		Date of Decision (If different from Date Signed):

Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008: Amendment: Republic of Korea: Law drafting instructions

Ratification of the Agreement between the Government of Jersey and the Government of the Republic of Korea on the Exchange of Information relating to Tax Matters.

PROPOSITION

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

To ratify the Agreement between the Government of Jersey and the Government of the Republic of Korea on the exchange of information relating to tax matters, as set out in the appendix to the report of the Chief Minister dated 31st July 2015.

CHIEF MINISTER

REPORT

Background

1. 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.

2. In September 2009, the Global Forum on Transparency and Information Exchange for Tax Purposes, a body of which over 120 jurisdictions are now members, agreed a peer review process to assess compliance with the international standard. Jersey has been assessed by the Global forum and rated as “largely compliant” with the international standards on exchange of information on request, a rating that is shared with Germany, Italy, the UK and the USA.

3. 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 favorable view of the Island amongst the international community.

4. The international tax information exchange standard can be met through either a Tax Information Exchange Agreement (TIEA) or a Double Tax Agreement (DTA). The advantage of a DTA 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. However, the majority of jurisdictions with whom the island has sought to negotiate an agreement have not been prepared to consider a DTA on the grounds that they would derive little, if any, benefit from such an agreement because Jersey is a zero tax jurisdiction.

6. The latest position in respect of the programme of negotiating tax agreements in attached as an appendix to this report. A total of thirty seven TIEAs and ten 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 domestics procedures for the ratification of the agreements. In addition since June 2014 Jersey has been party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and through this information can be exchanged with 54 jurisdictions. Some jurisdictions that were negotiating a TIEA with Jersey have now decided to rely on the provisions of the Convention.

7.Jersey is an “early adopter” of the Common Reporting Standard on Automatic Exchange of Information (AEOI) and will be in a position to exchange information automatically for 2016 in 2017. It is expected that when jurisdictions receive this information it will lead to more requests for information under the provisions of the TIEAs or the Multilateral Convention. Jersey is a vice chair of a Global Forum Working Group on AEOI.

The Agreement with the Government of the Republic of Korea

8.. The Agreement entered into with the Government of the Republic of Korea (“the Agreement”) is a continuation of the ongoing programme of entering into tax agreements to the international standard with G20, OECD and EU member jurisdictions. Korea is a member of the G20.

9. The Agreement is attached as an appendix to this report. The Agreement is in line with the OECD Model TIEA and provides for the exchange of information on tax matters on request. It is consistent with agreements signed previously with other jurisdictions and which the States have ratified.

10. Great importance is attached to maintaining a good relationship with the G20 Members and this Agreement is seen as a significant further strengthening of that relationship. It will also strengthen and enhance the existing business relationship with Korea and will help to facilitate greater market access.

Procedure for signing and ratifying the Agreement

11. The Jersey signing of the Agreement was undertaken by the Minister for External Relations in Jersey on the 21st July 2015. The signing was 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.

12. 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.

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. The necessary Regulations to provide for the inclusion in the Schedule of the Republic of Korea, and the relevant taxes covered, are being separately presented to the States for adoption.

Financial and manpower implications

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

31st July 2015