Taxation (Implementation)
(International Tax Compliance) (United States of America) (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 States of America to improve
international tax compliance and to implement FATCA signed on
13th December 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 8L;
“business document”
means –
(a) a
document that relates to the carrying on of a business, trade, profession or
vocation by a person and that forms part of a record under an enactment; or
(b) in
the case of a financial institution that does not carry on a business, trade,
profession or vocation, a document that an authorized person believes to be
relevant, or potentially relevant, to determining the compliance of the financial
institution with these Regulations;
“business premises”
means –
(a) premises
used in connection with the carrying on of a business,
trade, profession or vocation; or
(b) in
the case of a financial institution that does not carry on a business, trade,
profession or vocation, the address in Jersey –
(i) of the financial
institution, or
(ii) if
the financial institution is a trust, of a trustee;
“Commission” means a Commission of Appeal constituted
under Regulation 8H(3);
“Comptroller” means the Comptroller of Revenue;
“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.
2 Elections
to treat accounts as U.S reportable accounts
(1) Subject
to paragraph (3), the following accounts maintained by a reporting Jersey
financial institution are not U.S 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 U.S reportable accounts –
(a) pre-existing
individual accounts described in paragraph II.A(1), (2), (3) or (4) 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 subject to the condition stated
in that paragraph.
(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 U.S.
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 U.S 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 U.S reportable
accounts which it maintains; and
(b) secure
that the evidence used in accordance with this Regulation or, if applicable,
Regulation 5, or a record of the steps taken in accordance with this
Regulation or if applicable, Regulation 5, is kept for a period of
6 years beginning with the end of the year in which the requirements
applied to the U.S. 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 paragraph III.B 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 paragraph V.B of Annex I.
(3) The
due diligence requirements referred to in this Regulation must be applied with
reference to paragraphs I.B and VI.A to E 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 U.S. 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
reporting Jersey financial institution may, subject to Regulation 8(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 returns
(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)(a)
of the Agreement, subject to articles 3(3)(a) and 4 of the Agreement,
in relation to each U.S 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 6(4)(b) of
the Agreement.
(3) Where
a reporting Jersey financial institution maintains no U.S reportable accounts
no return is required.
(4) A
reporting Jersey financial institution must send a return under this Regulation
to the Comptroller by 30th June of the year following the calendar year to
which the return relates (“the reporting date”).
6A General
provisions relating to compliance[2]
(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.
7 Penalty
for late delivery of return under Regulation 6
(1) A
reporting Jersey financial institution which fails to deliver to the Comptroller
a return under Regulation 6 by the reporting date 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 U.S.
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.[3]
8 Offences[4]
(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 U.S. 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.[5]
(4) [6]
8A Application
of Regulations 8B to 8M[7]
Regulations 8B to 8M apply in respect of a U.S. reportable
account maintained by a reporting Jersey financial institution during 2016 and
any subsequent year but only to the extent that such an account is maintained
during any such year.
8B Penalty
for failure to comply with Regulations[8]
A person is liable to a penalty of £300 if the person fails to
comply with any obligation under these Regulations.
8C Daily
default penalty[9]
If –
(a) a
penalty under Regulation 8B 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.
8D Penalties
for inaccurate information[10]
(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.
8E Matters
to be disregarded in relation to liability to penalties[11]
(1) Liability
to a penalty under Regulation 8B or 8C 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.
8F Imposition
of penalties[12]
(1) If
a person becomes liable to a penalty under any of Regulations 8B to 8D the
Comptroller may impose the penalty.
(2) If
the Comptroller imposes a penalty, the Comptroller must notify the person.
(3) A
penalty under Regulation 8B or 8C 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 8D 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.
8G Right
of appeal against penalty[13]
(1) A
person upon whom a penalty is imposed may appeal against it on the ground that
liability to a penalty under Regulations 8B to 8D does not arise.
(2) A
person upon whom a penalty is imposed may appeal against its amount.
8H Commission
of Appeal and procedure on appeal against penalty[14]
(1) Notice
of an appeal under Regulation 8G 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 8F(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 8G; or
(b) an
application under Regulation 8I(2).[15]
(4) The
Comptroller shall notify the Commission of an appeal under Regulation 8G.
(5) On
an appeal under Regulation 8G(1) that is notified to the Commission by the
Comptroller, the Commission may confirm or cancel the penalty.
(6) On
an appeal under Regulation 8G(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 8J, the provisions of Part 6 of the
Income Tax (Jersey) Law 1961 shall have effect in
relation to appeals under Regulation 8G as they have effect in relation to
an appeal against an assessment to income tax.
8I Increased
daily default penalty[16]
(1) This
Regulation applies if –
(a) a
penalty under Regulation 8C is imposed under Regulation 8F;
(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 8C 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.
8J Enforcement
of penalties[17]
(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 8F or notification
under Regulation 8I(5) is given in respect of the penalty; or
(b) if
notice of appeal under Regulation 8G 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.
8JA Requirements
and penalties for trusts and partnerships[18]
(1) If a requirement or
penalty under these Regulations applies to a trust or partnership, the
requirement or penalty applies to –
(a) in
the case of a trust, each trustee, jointly and severally;
(b) in
the case of a partnership, the partner identified as the responsible partner
under Article 20E of the Income Tax (Jersey) Law 1961.
(2) These Regulations do
not prevent a penalty imposed on a trust or partnership from being recovered
from the assets of the trust or partnership.
8K Anti-avoidance[19]
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.
8L Power
to enter business premises and examine business documents[20]
(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.
8M Obstructing
an authorized person[21]
(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 8L; 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 8L.
(2) A
person who intentionally alters, suppresses or destroys any business document
that has been specified in a notice under Regulation 8L(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.
9 Citation
These Regulations may be cited as the Taxation (Implementation)
(International Tax Compliance) (United States of America) (Jersey)
Regulations 2014.