Taxation (Implementation)
(International Tax Compliance) (Common Reporting Standard) (Jersey)
Regulations 2015
1 Interpretation
(1) In these Regulations,
unless the context otherwise requires –
“1961 Law” means the Income Tax (Jersey)
Law 1961;
“Agreement” means the Multilateral Competent Authority
Agreement on Automatic Exchange of Financial Account Information signed by the
Government of Jersey on 29th October 2014 in relation to agreements
with Parties to the Convention to improve international tax compliance based on
CRS;
“authorized person” means the Comptroller or any person
authorized by the Comptroller to perform functions under Regulation 20;
“business document” means any document –
(a) that
relates to the carrying on of a business, trade, profession or vocation by any
person; and
(b) that
forms part of any record under any enactment;
“business premises” means premises used in connection
with the carrying on of a business, trade, profession or vocation;
“Commission” means a Commission of Appeal constituted
under Regulation 16(3);
“Comptroller” means the Comptroller of Revenue;
“Convention” means the Convention on Mutual
Administrative Assistance in Tax Matters which, as amended by the Protocol,
entered into force on 1st June 2011 and was signed on behalf of the
United Kingdom as extended to Jersey, with effect, in respect of Jersey, from 1st
June 2014;
“CRS” means the Common Reporting Standard for the
Automatic Exchange of Financial Account Information in Tax Matters as approved
by the Council of the Organisation for Economic Co-operation and Development
(“OECD”) on 15th July 2014 and published on the
OECD’s website;
“Minister” means the Minister for
External Relations;
“participating jurisdiction” means a country or
territory listed in Schedule 2, 3 or 4;
“Party to the Convention” means a country or territory
in respect of which the Convention is in force;
“relevant date” has the meaning in Regulation 2(1);
“relevant year” has the meaning in Regulation 2(2).[1]
(2) These Regulations are
to be construed as having effect for and in connection with the implementation
of the obligations of Jersey arising under the following
agreements –
(a) the
Agreement;
(b) any
other international governmental agreement to which Jersey and another
participating jurisdiction is a party and which provides for the automatic
exchange of tax information.
(3) These Regulations have
effect without prejudice to the Taxation (Implementation)
(International Tax Compliance) (United Kingdom) (Jersey) Regulations 2014.
(4) Schedule 1 sets
out words and expressions used in these Regulations which are defined in the
CRS.
(5) A word or expression
used in these Regulations which is defined in the CRS has the meaning given in
the CRS.[2]
(6) The Minister may by
Order amend any of Schedules 2, 3 and 4.
2 Meaning
of “relevant date” and “relevant year”
(1) In these Regulations
“relevant date” for the purposes of Regulation 3(1)
means –
(a) 31st
December 2015, in relation to the participating jurisdictions listed in Schedule 2;
(b) 31st
December 2016, in relation to the participating jurisdictions listed in Schedule 3;
(c) such
date in relation to a participating jurisdiction listed in Schedule 4 as
the Minister may specify by Order under Regulation 1(6) in relation to
that participating jurisdiction.
(2) In these Regulations
“relevant year” for the purposes of Regulations 5
and 8(1) means –
(a) 2016
in relation to the participating jurisdictions listed in Schedule 2;
(b) 2017
in relation to the participating jurisdictions listed in Schedule 3;
(c) such
year in relation to a participating jurisdiction listed in Schedule 4 as
the Minister may specify by Order under Regulation 1(6) in relation to
that participating jurisdiction.
3 Elections
to treat accounts as reportable accounts
(1) Subject to paragraph (3),
an account which is pre-existing entity account with an account balance or
value that does not exceed US $250,000 as of the relevant date is not a
reportable account for a calendar year unless an election by a reporting financial
institution is in force for that year to treat the account as being a reportable
account.
(2) In determining whether
or not an account meets the description in paragraph (1), the reporting
financial institution must apply the account balance aggregation and currency
rules described in VII.C of the CRS.
(3) In applying the rules
referred to in paragraph (2), an account balance that has a negative value
is treated as having a nil value.
(4) An election under paragraph (1)
may be made –
(a) in
relation to all accounts described in paragraph (1); or
(b) in
relation to a clearly identified group of accounts.
(5) An election under paragraph (1) –
(a) must
be made by being given to the Comptroller;
(b) must
be in such form as may be determined by the Comptroller;
(c) must
be made on or before the reporting date under Regulation 8(2).
4 Jersey
representative of a non-resident reporting financial institution
Where a reporting financial institution is not resident or is not
regarded as being resident in Jersey for the purposes of
the 1961 Law, any permanent establishment of that institution in
Jersey shall, to the extent that it is not itself a reporting financial institution
be deemed to be a reporting financial institution for the purposes of these
Regulations.
5 Due
diligence procedures for identifying, reviewing and reporting reportable
accounts
(1) A reporting financial
institution must establish and maintain arrangements which, in relation to the
relevant year and every following calendar year –
(a) meet
the applicable due diligence requirements set out Sections II to VII
of the CRS concerning the review, identification and reporting of all the
reportable accounts which it maintains; and
(b) secure
that the evidence used in accordance with this Regulation or, if applicable a
record of the steps taken in accordance with this Regulation, is kept for a
period of at least 5 years after the end of the period within which the
reporting financial institution must report the information required to be
reported.[3]
(2) Paragraph (1)
does not apply to an excluded account.
6 Modification
of due diligence requirements
A reporting financial
institution may do either or both of the following –
(a) apply
the due diligence requirements referred to in Regulation 5 for new
accounts to pre-existing accounts; and
(b) apply
the due diligence requirements referred to in Regulation 5 for high value
accounts to lower value accounts.
7 Option
for reporting financial institutions to comply with Regulations in relation to
participating jurisdictions listed in Schedules 3 and 4
(1) A reporting financial institution may, in relation to a
participating jurisdiction listed in Schedule 3 comply with
Regulation 5 in relation to reportable accounts of that participating
jurisdiction for the year 2016 as if that participating jurisdiction were
listed in Schedule 2 and apply Regulations 3, 4 and 6 accordingly.
(2) A
reporting financial institution may, in the absence of a relevant date and
relevant year being specified in relation to a participating jurisdiction
listed in Schedule 4 comply with Regulation 5 in relation to
reportable accounts of that participating jurisdiction as if that participating
jurisdiction were listed in Schedule 2 or Schedule 3 and apply
Regulations 3, 4 and 6 accordingly.
(3) Regulation 8
does not apply to a reporting financial institution to the extent that the
institution complies with Regulation 5 under paragraph (1) or (2).
(4) In
paragraphs (1) and (2) references to “reportable accounts of that
participating jurisdiction” refer to “[Jurisdiction A]
reportable accounts” or “[Jurisdiction B] reportable
accounts” as the context requires.
7A Transitional
provision regarding United Kingdom reportable accounts[4]
(1) In
relation to a United Kingdom reportable account maintained by a reporting
Jersey financial institution during 2016 which –
(a) is a
pre-existing individual low-value account or pre-existing entity account referred
to in Annex F to the Agreement;
(b) is
not identified as a reportable account for the purpose of exchanging
information by September 2017, as referred to in that Annex; and
(c) is an
account which the reporting Jersey financial institution chooses to treat as if
it were a reportable account for the purpose of exchanging information by
September 2017, as referred to that Annex,
these Regulations shall
apply as if the account were identified as a reportable account for the purpose
of exchanging information by September 2017.
(2) In
relation to a United Kingdom reportable account maintained by a reporting
Jersey financial institution during 2016 which is a reportable account
under any provision of these Regulations for the purpose of exchanging information
by September 2017 under these Regulations, compliance by the reporting
Jersey financial institution with the due diligence requirements of the Taxation (Implementation) (International Tax Compliance) (United
Kingdom) (Jersey) Regulations 2014 for the year 2016 (notwithstanding Regulation 1(8) of those
Regulations) may be treated as compliance with the due diligence requirements
of these Regulations.
(3) In
this Regulation ‘United Kingdom reportable account’ and
‘reporting Jersey financial institution’ have the same meaning as
in the Taxation (Implementation) (International Tax Compliance) (United
Kingdom) (Jersey) Regulations 2014.
8 Content
and timing of returns
(1) A reporting financial
institution must, in respect of the relevant year and every following calendar
year, prepare a return, in such form and manner as the Comptroller shall
determine, setting out the information specified in Section I of the CRS
in relation to each reportable account that is maintained by the institution at
any time during the calendar year in question.
(2) A reporting financial institution
must send a return under this Regulation to the Comptroller on or before 30th
June in the year following the calendar year to which the return relates (the
date for return under this paragraph being “the reporting date”).
9 Use
of service providers
As referred to in Section II(D) of the CRS, a reporting
financial institution may use a service provider to undertake the due diligence
requirements under Regulations 5 and 6 and the reporting obligations under
Regulation 8 but in such cases those obligations continue to be the
obligations of the reporting financial institution.
10 Penalty
for failure to comply with Regulations
A person is liable to a
penalty of £300 if the person fails to comply with any obligation under
these Regulations.
11 Daily
default penalty
If –
(a) a
penalty under Regulation 10 is imposed; and
(b) the
failure in question continues after the person has been notified of the
penalty,
the person is liable to a
further penalty, for each subsequent day on which the failure continues, of an
amount not exceeding £60 for each day.
12 Penalties
for inaccurate information
(1) a
person is liable to a penalty not exceeding £3,000 if –
(a) in
complying with an obligation under Regulation 8 the person provides
inaccurate information; and
(b) condition
A, B or C is met.
(2) Condition A
is that the inaccuracy is –
(a) due
to a failure to comply with the due diligence requirements in Regulation 5
(as modified by Regulation 6 where that Regulation applies); or
(b) deliberate
on the part of the person.
(3) Condition B
is that the person knows of the inaccuracy at the time the information is
provided but does not inform the Comptroller at that time.
(4) Condition C
is that the person –
(a) discovers
the inaccuracy after the information is provided to the Comptroller; and
(b) fails
to take reasonable steps to inform the Comptroller.
12A Matters to be taken into account in
determining liability to penalties[5]
In determining whether a
person is liable to a penalty under these Regulations, the Comptroller shall
take into account –
(a) the
CRS; and
(b) related
commentaries on the CRS published on the OECD’s website.
13 Matters
to be disregarded in relation to liability to penalties
(1) Liability
to a penalty under Regulation 10 or 11 does not arise if the person
satisfies the Comptroller or, (on an appeal notified by the Comptroller to the
Commission) the Commission, that there is a reasonable excuse for the failure.
(2) For
the purposes of this Regulation, neither of the following is a reasonable
excuse –
(a) that
there is an insufficiency of funds to do something;
(b) that
a person relies upon another person to do something.
(3) If
a person had a reasonable excuse for a failure but the excuse has ceased, the
person is to be treated as having continued to have the excuse if the failure
is remedied without unreasonable delay after the excuse has ceased.
14 Imposition
of penalties
(1) If
a person becomes liable to a penalty under any of Regulations 10 to 12 the
Comptroller may impose the penalty.
(2) If
the Comptroller imposes a penalty, the Comptroller must notify the person.
(3) A
penalty under Regulation 10 or 11 may only be imposed within the period of
12 months beginning with the date on which the person became liable to the
penalty.
(4) A
penalty under Regulation 12 may only be imposed –
(a) within
the period of 12 months beginning with the date on which the inaccuracy
first came to the attention of the Comptroller; and
(b) within
the period of 6 years beginning with the date on which the person became
liable to the penalty.
15 Right
of appeal against penalty
(1) A
person upon whom a penalty is imposed may appeal against it on the ground that
liability to a penalty under Regulations 10 to 12 does not arise.
(2) A
person upon whom a penalty is imposed may appeal against its amount.
16 Commission
of Appeal and procedure on appeal against penalty
(1) Notice
of an appeal under Regulation 15 must be given to the
Comptroller –
(a) in
writing; and
(b) before
the end of the period of 30 days beginning with the date on which
notification to the person under Regulation 14 was given.
(2) The
notice under paragraph (1) must state the ground of appeal.
(3) A
Commission of Appeal shall be constituted for the purpose of
hearing –
(a) an
appeal under Regulation 15; or
(b) an
application under Regulation 17(2),
as it would be constituted
from the Commissioners of Appeal appointed under Article 10(1) of
the 1961 Law for the purpose of hearing appeals under
the 1961 Law.
(4) The
Comptroller shall notify the Commission of an appeal under Regulation 15.
(5) On
an appeal under Regulation 15(1) that is notified to the Commission by the
Comptroller, the Commission may confirm or cancel the penalty.
(6) On
an appeal under Regulation 15(2) that is notified to the Commission by the
Comptroller, the Commission may –
(a) confirm
the penalty; or
(b) substitute
another penalty that the Comptroller has power to impose under these
Regulations.
(7) Subject
to this Regulation and Regulation 18, the provisions of Part 6 of
the 1961 Law shall have effect in relation to appeals under
Regulation 15 as they have effect in relation to an appeal against an
assessment to income tax.
17 Increased
daily default penalty
(1) This
Regulation applies if –
(a) a
penalty under Regulation 11 is imposed under Regulation 14;
(b) the
failure in respect of which that penalty is imposed continues for more than
30 days beginning with the date on which notification of that penalty is
given; and
(c) the
person has been told that an application may be made under this Regulation for
an increased daily penalty to be imposed.
(2) If
this Regulation applies, the Comptroller may make an application to the
Commission for an increased daily penalty to be imposed on the person.
(3) If
the Commission decides that an increased daily penalty should be imposed then
for each applicable day on which the failure continues –
(a) the
person is not liable to a penalty under Regulation 11 in respect of the
failure; and
(b) the
person is liable instead to a penalty under this Regulation of an amount
determined by the Commission.
(4) The
Commission must not determine an amount exceeding £1,000 for each
applicable day.
(5) If
a person becomes liable to a penalty under this Regulation, the Comptroller
must notify the person.
(6) The
notification must specify the day from which the increased penalty is to apply.
(7) That
day and any subsequent day is an “applicable day” for the purposes
of this Regulation.
18 Enforcement
of penalties
(1) A
penalty under these Regulations must be paid before the end of the period of
30 days beginning with the date mentioned in paragraph (2).
(2) That
date is the later of –
(a) the
date on which the penalty is imposed under Regulation 14 or notification
under Regulation 17(5) is given in respect of the penalty; or
(b) if
notice of appeal under Regulation 16 is given, the date on which the
appeal is finally determined or withdrawn.
(3) A
penalty under these Regulations may be enforced as if it were income tax
charged in an assessment and due and payable.
19 Anti-avoidance
If –
(a) a
person enters into any arrangements; and
(b) the
main purpose, or one of the main purposes, of the person in entering into those
arrangements is to avoid any requirement of these Regulations,
these Regulations shall
have effect as if the arrangements had not been entered into.
20 Power
to enter business premises and examine business documents
(1) An
authorized person may examine and take copies of any business document that is
located on business premises.
(2) The
power under paragraph (1) may be exercised only for the purpose of
investigating any issue relating to compliance with these Regulations.
(3) An
authorized person may at any reasonable hour enter business premises for the
purpose of exercising the power under paragraph (1).
(4) An
authorized person may by notice require any person to produce any specified
business document at the business premises where the business document is
located for the purpose of enabling the authorized person to exercise the power
under paragraph (1) in relation to that document.
(5) An
authorized person shall not exercise the powers under this Regulation in
respect of any document which a person would, in an action in Court, be
entitled to refuse to disclose or produce on the grounds of legal professional
privilege.
21 Obstructing
an authorized person
(1) A
person shall be guilty of an offence if, without reasonable excuse, the
person –
(a) obstructs
an authorized person in the exercise of the authorized person’s powers
under Regulation 20; or
(b) fails
to provide such reasonable assistance as an authorized person may require when
the authorized person is exercising his or her powers under Regulation 20.
(2) A
person who intentionally alters, suppresses or destroys any business document
that has been specified in a notice under Regulation 20(4) shall be guilty
of an offence.
(3) A
person who is guilty of an offence under paragraph (1) shall be liable to
imprisonment for a term of 6 months and to a fine.
(4) A
person who is guilty of an offence under paragraph (2) shall be liable to
imprisonment for a term of 2 years and to a fine.
22 Citation
These Regulations may be cited as the Taxation (Implementation)
(International Tax Compliance) (Common Reporting Standard) (Jersey)
Regulations 2015.