Jersey Edge Closer to Implementing Mandatory Disclosure Rules

The Taxation (Implementation) (International Tax Compliance) (Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures) (Jersey) Regulations 2020 are expected to come into force in Jersey by the end of 2021.

What is included in the Jersey Mandatory Disclosure Rules?

The regime is closely aligned with the OECD’s Mandatory Disclosure Rules relating to Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures.

The Comptroller of Revenue is expected to release further guidance in the coming months explaining what exactly will be captured under these arrangements. Arrangements may still be reportable, even if the beneficiaries of such arrangements are not Jersey residents.

Who must report?

The reporting obligation primarily rests with Jersey residents, Jersey established persons, or entities with Jersey offices that are considered to be “intermediaries” to reportable arrangements. Intermediaries may include ‘promoters’ who are responsible for the design or marketing of arrangements or ‘service providers’ who provide assistance or advice in relation to relevant arrangements are also included within the scope of the regulations.

If a Jersey-based intermediary is not subject to the mandatory disclosure requirements for reasons such as legal professional privilege (which may apply in some cases), taxpayers themselves may also be obliged to disclose reportable arrangements.

When must reports be filed?

Reports must be filed with the Revenue Comptroller no later than 30 days after the intermediary makes available for implementation a Common Reporting Standard arrangement or an opaque structure, or 30 days after the intermediary provides relevant services in respect of the CRS avoidance arrangement or opaque offshore structure.

How will reports be filed?

Reports will be filed via the existing Information Gateway Online Report (“IGOR”), in all likelihood, through a schema released by the OECD.

Is there a historic back look period?

Intermediaries who are classified as “Service Providers” do not have a retroactive historic back look period. However, intermediaries who are considered to be “Promoters” will be required to report any relevant arrangements since 29 October 2014 that have a total aggregate financial account balance value of at least GBP 600,000.

What are the penalties for failure to comply?

An intermediary or taxpayer who either fails to report or who knowingly provides inaccurate information to the Revenue Comptroller may be liable for monetary penalties up to £3,000 per arrangement. There could also be additional criminal sanctions, including imprisonment, for obstructing an authorised person from entering a business for the purposes of investigating suspected contraventions of the Regulations and for altering, suppressing or destroying certain business documents identified in a ‘notice’ under the Regulations.

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