Taxation (Implementation)
(International Tax Compliance) (United Kingdom) (Jersey) Regulations 2014
1 Interpretation and application
(1) In these Regulations,
unless the context otherwise requires –
“Agreement” means the agreement between the Government
of Jersey and the Government of the United Kingdom of Great Britain and
Northern Ireland to improve international tax compliance signed on
22nd October 2013, as that agreement has effect from time to time;
“Annex” means an Annex to the Agreement;
“authorized person” means the Comptroller
or any person authorized by the Comptroller to perform functions under
Regulation 9L;
“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 14(3);”
“Comptroller” means the Comptroller of Revenue;
“CRS Agreement” has the same meaning as
“Agreement” in Regulation 1(2) of the CRS Regulations;
“CRS Regulations” means the Taxation (Implementation)
(International Tax Compliance) (Common Reporting Standard) (Jersey)
Regulations 2015;
“Minister” means the Minister for
External Relations;
“U.S. Treasury regulations” means the regulations under
chapter 4 of Subtitle A (sections 1471 to 1474) of the Internal
Revenue Code of 1986 of the United States regarding information reporting
by foreign financial institutions with respect to United States accounts and
withholding on certain payments by foreign financial institutions to other
persons, such regulations being commonly known as the Foreign Account Tax
Compliance Act.[1]
(2) The Schedule sets out
words and expressions used in these Regulations which are defined in the Agreement.
(3) In these Regulations, a
word or expression which is defined in the Agreement has the meaning in that
Agreement except to the extent that a reporting Jersey financial institution
may use as an alternative a definition in –
(a) the
U.S. Treasury regulations; or
(b) the
Common Reporting Standard for the Automatic Exchange of Financial Account
Information published by the Organisation for Economic Co-operation and
Development on 13th February 2014,
in so far as such use would not frustrate the purposes of the
Agreement.
(4) In determining whether or not use of a definition referred to in paragraph (3)
would frustrate the purposes of the Agreement, a reporting Jersey financial
institution shall take account of any guidance issued or approved by the Minister.
(5) To the extent a
specific provision of the Annexes is not referred to in these Regulations,
these Regulations shall be applied having regard to the relevant provisions of
the Annexes.
(6) Where a financial
account is held jointly by 2 or more persons (but not where the account is held
solely by a partnership), these Regulations are to be applied separately in
relation to each account holder as if the holder were entitled to the whole of
the balance of value of the account.
(7) In relation to any
United Kingdom reportable account maintained by a reporting Jersey financial
institution during 2016, notwithstanding Regulation 7(3), an election
under Regulation 7 is of no effect in relation to the treatment of that
account during that year.[2]
(8) In relation to any
United Kingdom reportable account maintained by a reporting Jersey financial
institution during 2016 which –
(a) is a
reportable account for the purpose of the CRS Regulations; or
(b) is a
pre-existing low-value account or pre-existing entity account referred to in
Annex F to the CRS Agreement which is not identified as a reportable
account for the purpose of exchanging information by September 2017 for the
purpose of that Agreement but which the reporting Jersey financial institution
chooses to treat as if it were such an account, these Regulations do not apply
to the extent that the account is maintained during 2016.[3]
(9) In relation to any
United Kingdom reportable account maintained by a reporting Jersey financial
institution during 2017 and each following calendar year, notwithstanding
Regulation 6(1), these Regulations do not apply to the extent that the account
is maintained during those years.[4]
(10) In relation to a United
Kingdom reportable account maintained by a reporting Jersey financial
institution during 2014 or 2015 or to an account maintained
during 2016 to which paragraph (8) does not apply, nothing in those
paragraphs shall affect the application of these Regulations to the extent that
the account is maintained during 2014, 2015 or 2016,
as the case may be.[5]
2 Elections
to treat accounts as United Kingdom reportable accounts
(1) Subject to paragraph (3),
the following accounts maintained by a reporting Jersey financial institution are
not United Kingdom reportable accounts for a calendar year unless an election
by the reporting Jersey financial institution is in force for that year to
treat the accounts as being United Kingdom reportable accounts –
(a) pre-existing
individual accounts described in paragraph II.A
of Annex I;
(b) new
individual accounts described as not requiring to be reviewed, identified or
reported in paragraph III.A of Annex I;
(c) pre-existing
entity accounts described as not requiring to be reviewed, identified or
reported in paragraph IV.A of Annex I;
(d) new
entity accounts described as not requiring to be reviewed, identified
or reported in paragraph V.A of Annex I
provided that the condition described in that paragraph is met.
(2) In determining whether or not an account meets any of the descriptions in paragraph (1),
the institution must apply the account balance aggregation and currency translation
rules described in paragraph VI.C of
Annex I.
(3) Notwithstanding an
election under paragraph (1) in respect of an account described in sub-paragraph (a)
of that paragraph, an account shall be treated as a United Kingdom reportable
account in the circumstances described in paragraph II.E.2 of
Annex I.
(4) An election under paragraph (1)
may be made –
(a) in
relation to all accounts of a category described in paragraph (1)(a), (b),
(c) or (d);
(b) separately
in relation to individual accounts; or
(c) in
relation to a clearly identified group of accounts.
(5) An election under paragraph (1) –
(a) is to
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 6(4).
3 Jersey
representative of a non-resident reporting Jersey financial institution
Where a reporting Jersey financial institution is not resident or is
not regarded as being resident in Jersey for the purposes of the Income Tax (Jersey)
Law 1961, any permanent establishment of that institution in Jersey shall,
to the extent that it is not itself a reporting Jersey financial institution be
deemed to be a reporting Jersey financial institution for the purposes of these
Regulations.
4 Due
diligence procedures for identifying, reviewing and reporting United Kingdom
reportable accounts
(1) A reporting Jersey
financial institution must establish and maintain arrangements
which –
(a) meet
the applicable due diligence requirements set out in paragraph (2)
concerning the review, identification and reporting of all the United Kingdom
reportable accounts which it maintains; and
(b) secure
that the evidence used in accordance with this Regulation or, if applicable,
Regulation 5 or 7, or a record of the steps taken in accordance with this
Regulation or if applicable, Regulation 5 or 7, is kept for a period
of 6 years beginning with the end of the year in which the requirements
applied to the United Kingdom reportable accounts.
(2) The applicable due
diligence requirements are –
(a) in
relation to –
(i) pre-existing
individual accounts referred to in Regulation 2(1)(a) in respect of which
there is an election under that Regulation, and
(ii) lower
value accounts,
the requirements set out in paragraphs II.B
and II.C of Annex I;
(b) in
relation to high value accounts, the requirements set out in paragraphs II.D and II.E of Annex I;
(c) in
relation to –
(i) new
individual accounts referred to in Regulation 2(1)(b) in respect of which
there is an election under that Regulation, and
(ii) all
other new individual accounts,
the requirements set out in paragraphs III.B
to III.D of Annex I;
(d) in
relation to –
(i) pre-existing
entity accounts referred to in Regulation 2(1)(c) in respect of which
there is an election under that Regulation, and
(ii) pre-existing
entity accounts described in paragraphs IV.B
and IV.C of Annex I,
the requirements set out in paragraphs IV.D
and IV.E of Annex I;
(e) in
relation to –
(i) new
entity accounts referred to in Regulation 2(1)(d) in respect of which
there is an election under that Regulation, and
(ii) all
other new entity accounts,
the requirements set out in paragraphs V.B
to V.D of Annex I.
(3) The due diligence
requirements referred to in this Regulation must be applied with reference to
paragraphs I.B, I.D
and VI of Annex I.
5 Modification
of due diligence requirements
(1) As an alternative to
the due diligence requirements described in Regulation 4, a reporting
Jersey financial institution may, in order to identify
whether an account is a United Kingdom reportable account in respect of a
calendar year, apply the procedures in the U.S. Treasury Regulations if an
election has been made by the reporting Jersey financial institution to apply
such procedures in respect of such an account for that calendar year.
(2) An election under paragraph (1)
may be made –
(a) in
relation to all accounts; or
(b) in
relation to a clearly identified group of accounts.
(3) Regardless of whether or not an election has been made under paragraph (1),
a Jersey financial institution may, subject to Regulation 9(4), rely on
procedures performed by third parties to the extent provided in the U.S.
Treasury regulations in order to comply with its requirements under these
Regulations.
6 Content
and timing of reports
(1) A reporting Jersey financial
institution must, in respect of 2014 and every following calendar year,
prepare a return, in such form and manner as the Comptroller shall determine, setting
out the information specified in article 2(2) of the Agreement, subject to
article 3(3) of the Agreement, in relation to each United Kingdom
reportable account that is maintained by the institution at any time during the
calendar year in question.
(2) [6]
(3) Where a reporting Jersey
financial institution maintains no United Kingdom reportable accounts no return
is required.
(4) A reporting Jersey
financial institution must send a return under this Regulation to the
Comptroller on or before 30th June of the year following the calendar year to
which the return relates with the exception of
the 2014 calendar year for which a return must be sent on or before
30th June 2016 (the date for return under this paragraph being
“the reporting date”).
7 Election
and certification for the purposes of the alternative reporting regime under
Annex IV to the Agreement
(1) A reporting Jersey
financial institution may make an election to the Comptroller to offer the
alternative reporting regime referred to in Annex IV in relation to the
United Kingdom Reportable Accounts of specified United Kingdom persons.
(2) An election under paragraph (1)
must be made in such form and manner as is determined by the Comptroller and on
or before 30th May following the end of a relevant tax year, as defined in
paragraph G of Annex IV.
(3) An election under paragraph (1)
is in force until such time as it is revoked by the reporting Jersey financial
institution by notice to the Comptroller in such form and manner as is
determined by the Comptroller.
(4) Where an election under
paragraph (1) is in force and the conditions referred to in Annex IV
are complied with, a reporting Jersey financial institution is not required to
comply with article 2 of the Agreement, except to the extent referred to
in Annex IV of the Agreement as required by paragraph (5) or (6)
below.
(5) A reporting Jersey
financial institution shall, in relation to each United Kingdom reportable
account in respect of which –
(a) an
election under paragraph (1) is in force; and
(b) the
certification requirements in paragraph C.1 of Annex IV are complied
with,
send to the Comptroller the information described in
paragraph D of Annex IV on or before 30th June in the relevant tax
year that begins 12 months after the end of the relevant tax year to which
the return relates or by such earlier date as is notified to the account holder
by the reporting Jersey financial institution.[7]
(6) A reporting Jersey
financial institution shall, in relation to each United Kingdom reportable
account in respect of which –
(a) an
election under paragraph (1) is in force; and
(b) the
certification requirements in paragraph C.1 of Annex IV are not
complied with,
send to the Comptroller the information described in Article 2
of the Agreement, subject to Article 3(3), by the date that is one year
after the reporting date referred to in Regulation 6(4).
7A General
provisions relating to compliance[8]
(1) In determining whether
a person has complied with any requirement of these Regulations, a court shall
have regard to any guidance issued or approved by the Minister.
(2) A reporting Jersey
financial institution may use a third party for the purpose of complying with
these Regulations but compliance with such requirements remains the
responsibility of the reporting Jersey financial institution.
8 Penalty
for late delivery of return under Regulation 6 or 7
(1) A reporting Jersey
financial institution which fails to deliver to the Comptroller –
(a) a
return under Regulation 6 by the reporting date; or
(b) the
information referred to in Regulation 7(5) or (6) by the date
specified in the applicable paragraph,
shall be liable to pay to the Comptroller a penalty of £250.
(2) The Comptroller shall
issue a written notice to a person of the person’s liability under paragraph (1).
(3) A penalty payable under
this Regulation shall be recoverable as if it were a civil debt due to the
Comptroller.
(4) This Regulation applies
in respect of a return or information relating to a United Kingdom reportable
account maintained by a reporting Jersey financial institution during 2014
or 2015 but only to the extent that such an account is maintained during
either or both of those years.[9]
9 Offences[10]
(1) A person who knowingly
fails to comply with any requirement of these Regulations shall be guilty of an
offence and liable to a fine.
(2) A person who provides
information or produces any document when required by or for the purposes of
these Regulations which the person believes to be false or misleading in a
material particular shall be guilty of an offence and
liable to imprisonment of a term of 2 years and to a fine.
(3) Paragraphs (1) and
(2) apply to any requirement which relates to a United Kingdom reportable
account maintained by a reporting Jersey financial institution during 2014
or 2015 but only to the extent that such an account is maintained during
either or both of these years.[11]
(4) [12]
9A Application
of Regulations 9B to 9M[13]
Regulations 9B to 9M apply in respect of a United Kingdom
reportable account maintained by a reporting Jersey financial institution
during 2016 but only to the extent that such an account is maintained that
year.
9B Penalty
for failure to comply with Regulations[14]
A person is liable to a penalty of £300 if the person fails to
comply with any obligation under these Regulations.
9C Daily
default penalty[15]
If –
(a) a penalty under
Regulation 9B 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.
9D Penalties
for inaccurate information[16]
(1) A person is liable to a
penalty not exceeding £3,000 if –
(a) in
complying with an obligation under Regulation 6 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 4
(as modified by Regulation 5 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.
9E Matters
to be disregarded in relation to liability to penalties[17]
(1) Liability to a penalty
under Regulation 9B or 9C 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.
9F Imposition
of penalties[18]
(1) If a person becomes
liable to a penalty under any of Regulations 9B to 9D the Comptroller
may impose the penalty.
(2) If the Comptroller
imposes a penalty, the Comptroller must notify the person.
(3) A penalty under
Regulation 9B or 9C 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 9D
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.
9G Right
of appeal against penalty[19]
(1) A person upon whom a
penalty is imposed may appeal against it on the ground that liability to a
penalty under Regulations 9B to 9D does not arise.
(2) A person upon whom a
penalty is imposed may appeal against its amount.
9H Commission
of Appeal and procedure on appeal against penalty[20]
(1) Notice of an appeal
under Regulation 9G 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 9F(2)
was given.
(2) The notice under paragraph (1)
must state the ground of appeal.
(3) A Commission of Appeal
under Article 5 of the Revenue Administration
(Jersey) Law 2019 shall be constituted for the purpose of
hearing –
(a) an
appeal under Regulation 9G; or
(b) an
application under Regulation 9I(2).[21]
(4) The Comptroller shall
notify the Commission of an appeal under Regulation 9G.
(5) On an appeal under
Regulation 9G(1) that is notified to the
Commission by the Comptroller, the Commission may confirm or cancel the
penalty.
(6) On an appeal under
Regulation 9G(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 9J, the provisions of Part 6 of the Income Tax (Jersey) Law 1961 shall have effect in
relation to appeals under Regulation 9G as they have effect in relation to
an appeal against an assessment to income tax.
9I Increased
daily default penalty[22]
(1) This Regulation applies
if –
(a) a
penalty under Regulation 9C is imposed under Regulation 9F;
(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 9C 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.
9J Enforcement
of penalties[23]
(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 9F or notification
under Regulation 9I(5) is given in respect of the
penalty; or
(b) if
notice of appeal under Regulation 9H 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.
9K Anti-avoidance[24]
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.
9L Power
to enter business premises and examine business documents[25]
(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.
9M Obstructing
an authorized person[26]
(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 9L; 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 9L.
(2) A person who
intentionally alters, suppresses or destroys any business document that has
been specified in a notice under Regulation 9L(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.
10 Citation
These Regulations may be cited as the Taxation (Implementation)
(International Tax Compliance) (United Kingdom) (Jersey) Regulations 2014.