Contact: Voison (Jersey)
USA – FATCA
In 2014, the Foreign Account Tax Compliance Act (“FATCA”) enacted in the USA as part of the March 2010 HIRE Act will come into force. The introduction of FATCA will create a new tax information reporting and withholding regime for payments made to, or by, non-USA based financial institutions (“FFIs”) and other foreign entities to US citizens and US taxpayers. FATCA will have a global application and its impact will be common to all jurisdictions.
Jersey is looking to comply with its provisions through the signing of an Inter- Governmental Agreement (“IGA”) between the Island and the US. This will lessen the burden on financial institutions compared to a direct relationship between the institutions and the IRS and is the approach being adopted by the majority of jurisdictions to date.
UK - IGA and Disclosure facility
On 20 March 2013, it was announced that Jersey is to enter into an agreement with the UK Government that will provide for tax information sharing arrangements similar to FATCA. This agreement is reflective of the Island’s special relationship with the UK and its long-standing commitment to join in the global action to combat tax evasion. Initially, the UK government requested that Jersey enter into an IGA-style arrangement only. However, during the course of on-going discussions with Her Majesty’s Treasury (“HMT”) regarding such an agreement, Jersey’s officials requested consideration of a carve-out for UK Resident non-domiciled individuals (“RNDs”). HMT indicated that this would be considered, but sought to link this concession to the implementation of a disclosure facility.
