Agreement between Jersey and United Arab Emirates for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income: Ratification

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 on 21 June 2016:

Decision Reference: MD-ER-2016-0021
Decision Summary Title :	Ratification of the Agreement between the Government of Jersey and the Government of the United Arab Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.		Date of Decision Summary:	2 June 2016
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 :	Ratification of the Agreement between the Government of Jersey and the Government of the United Arab Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income		Date of Written Report:	2 June 2016
Written Report Author:	Adviser – International Affairs		Written Report : Public or Exempt?	Public
Subject: Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income between the Government of Jersey and the Government of the United Arab Emirates
Decision(s): The Minister for External Relations approved for lodging au Greffe a report and proposition inviting the States to ratify the Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income between the Government of Jersey and the Government of the United Arab Emirates
Reason(s) for Decision: The Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income between the Government of Jersey and the Government of the United Arab Emirates was signed on the 20 April 2016. 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.
Resource Implications: There are no financial or manpower implications arising from the Agreement
Action required: The Greffier of the States is requested to lodge “au Greffe” the report and proposition cited above with a view to securing the earliest possible date for debate.
Signature:		Position: Minister for External Relations
Date Signed:		Date of Decision (If different from Date Signed):

Agreement between Jersey and United Arab Emirates for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income: Ratification

Ratification of the Agreement between the Government of Jersey and the Government of the United Arab Emirates 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 the Government of Jersey and the Government of the United Arab Emirates 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 Chief Minister dated 2 June 2016.

Minister for External Relations

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. . 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 priority being given to 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.

3. . There are occasions when an agreement is sought with a jurisdiction that is not an EU, OECD or G20 member. In accordance with its commitment to the OECD tax initiative Jersey is required to enter into a tax information exchange agreement with any jurisdiction that can be considered to be a relevant partner. This together with the views of the finance industry on whether a tax agreement with the jurisdiction concerned would be supportive of business development are factors taken into account when deciding whether or not the negotiation of an agreement would be justified, and if so what priority to attach to the negotiations.

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.

5. The latest position in respect of the programme of negotiating tax agreements in attached as an appendix to this report. A total of thirty eight TIEAs and eleven DTAs have now been signed of which thirty four TIEAs and ten 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. In addition there are 22 jurisdictions with whom Jersey does not have a bilateral TIEA or DTA but where information exchange can be provided for through their being a party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, of which Jersey became a party in June 2014.

”

The Agreement with the Government of the United Arab Emirates

9. The Agreement entered into with the Government of the United Arab Emirates (“the Agreement”) is a continuation of the ongoing programme of entering into tax agreements to the international standard with relevant partners.

10. 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.

11. While the United Arab Emirates is not a G20 or OECD member country it is seen as a relevant partner. The finance industry was consulted and the signing of the Agreement is seen as a significant step in support of the efforts being made by the finance industry to take advantage of the many trading and investment opportunities to be found in the Gulf region .

Procedure for signing and ratifying the Agreement

12. The Agreement was signed by the Chief Minister 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.

13. 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.

14. 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 Government of the United Arab Emirates will be presented to the States for adoption following the ratification of the Agreement.

Financial and manpower implications

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

2 June 2016