Contact: Voisin (Jersey)
Responding to criticism of tax avoidance schemes that have brought Jersey’s finance industry into the media spotlight, Jersey’s government recently outlined a package of measures designed to reinforce their policy that Jersey does not welcome abusive tax planning structures.
Jersey’s government has confirmed that a new framework will be introduced in October 2014 whereby financial services businesses will have to advise the Island’s regulator if their clients are using aggressive tax avoidance schemes.
In a move that responds to recent media criticism, Jersey’s Chief Minister, Senator Ian Gorst and Treasury Minister, Senator Philip Ozouf, issued a statement on 29 July 2014 outlining a package of measures that sends a clear message that abusive tax schemes will not be tolerated in Jersey. The statement confirmed that Jersey would work with the UK’s HMRC to support its newly-introduced measures to deal with abusive tax avoidance schemes. Jersey’s automatic information exchange agreement with the UK will allow the UK HMRC access to all reportable information in relation to their taxpayers, and to take action in respect of historic tax schemes they consider to be abusive.
Outlining the new course of action that comes into force in October 2014, the statement said:
“In parallel with the work the UK has been undertaking, we have been working with industry and the Jersey Financial Services Commission (JFSC) to put in place a package of measures that will embed and reinforce the policy position that Jersey does not welcome abusive tax planning structures. These measures will also provide a framework allowing action to be taken by Government under Jersey’s business licensing regime against those who use the jurisdiction to facilitate abusive tax schemes targeted at UK residents.”
Financial services businesses will henceforth have to record transactions where the use of tax avoidance schemes by their clients has been identified. These transactions will be monitored by the JFSC in the course of its compliance assessments and businesses risk losing their licence to trade if they are found to be contravening these guidelines.Geoff Cook, the CEO of Jersey Finance, gave his support to the measures on behalf of Jersey’s finance industry, saying:
“We welcome the ministers’ comments that they support fair tax competition and have emphasised that legitimate tax planning is an appropriate response to operating cross border. Legitimate tax planning remains a key focus of our offering together with the high regulatory standards to which we adhere.”
