Taxation
(Implementation) (International Tax Compliance) (United Kingdom) (Jersey)
Regulations 2014
Made 17th June 2014
Coming into force 18th
June 2014
THE STATES, in pursuance of Article 2 of the Taxation (Implementation)
(Jersey) Law 2004[1], and following the decision of
the States, taken on the day these Regulations are made, to adopt P.66 of 2014,
have made the following Regulations –
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;
“Comptroller” means
the Comptroller of Taxes;
“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;
(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.
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[2], 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) In
respect of 2017 and subsequent years, a reporting Jersey financial institution
must report the information described in article 5(2) of the Agreement.
(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 May following the end of the relevant tax year or by such
earlier date as is notified to the account holder by the reporting Jersey
financial institution.
(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).
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.
9 Offences
and general provisions relating to compliance
(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) 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.
(4) 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.
10 Citation
and commencement
These Regulations may be cited as the Taxation (Implementation)
(International Tax Compliance) (United Kingdom) (Jersey) Regulations 2014
and shall come into force on the day after they are made.
m.n. de la haye, o.b.e.
Greffier of the States