On November 6 2013 the Taxation (Exchange of Information with Third Countries) (Amendment 7) (Jersey) Regulations 2008 came into force, having been lodged with the States of Jersey only two weeks earlier. The report accompanying the amendment states that its main objective is to address a number of perceived shortcomings with the current regime and Jersey's inclusion on the French list of non-cooperative jurisdictions.
The report signals a clear commitment to ensuring that tax information requests made of Jersey entities are dealt with quickly and in line with international standards. Crucially, the changes will apply retrospectively to existing requests, subject to certain exceptions. The report envisages that this may expedite Jersey's removal from France's list of non-cooperative jurisdictions.
The key changes include:
- limiting the statutory scope for appeal to judicial review grounds only (instead of an appeal being put on the basis that the notice is outside the scope of the regulations, in future the appeal will have to be put on the basis that the comptroller was acting illegally, irrationally or under some procedural impropriety);
- removing several references to the need to act reasonably and to demanding only information that is reasonably required (presumably to make the comptroller's decisions less susceptible to judicial review);
- deleting the requirement for the comptroller to provide a summary of the reasons for giving the notice (presumably for the same reasons as above);
- reducing the period for responding to a notice from 30 to 15 days;
- curtailing the appeal route itself, such that if an appellant loses its case before the Royal Court, the appellant can appeal only to the Privy Council (with leave), removing the existing right of appeal to the Court of Appeal;
- restricting the time period for any application for judicial review to 14 days after receipt of a notice;
- carving certain matters out of the scope of judicial review altogether (eg, any decision by the comptroller not to allow a third-party recipient to disclose a third-party notice to a taxpayer); and
- requiring information to be provided even when a judicial review has been commenced (however, this information will not be provided to the foreign tax authority until the judicial review has been determined, unless the Royal Court grants permission to do so).
The Jersey tax information exchange agreement regime will therefore now require quicker and more decisive action from recipients of notices, in particular those of third-party notices.
It is understood that a challenge by way of judicial review to the validity of the regulations may be pending, as foreshadowed in the recent judgment in APEF Management Company 5 Ltd v Comptroller of Taxes ( JRC 205A).
For further information on this topic please contact Edward Mackereth at Ogier by telephone (+44 1534 504 000), fax (+44 1534 504 444) or email (email@example.com). The Ogier website can be accessed at www.ogier.com.
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