Taxation
(Implementation) (International Tax Compliance) (United States of America)
(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.68 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
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;
“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 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[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 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”).
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.
8 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.
9 Citation
and commencement
These Regulations may be cited as the Taxation (Implementation)
(International Tax Compliance) (United States of America) (Jersey) Regulations 2014
and shall come into force on the day after they are made.
l.-m. hart
Deputy Greffier of the States