Posted: 13/12/2013
An intergovernmental agreement between Jersey and the USA was signed at the US Embassy in London today (13 December). The agreement to improve international tax compliance and to implement FATCA (the US Foreign Account Tax Compliance Act) was signed by the Chief Minister, Senator Ian Gorst, on behalf of the Government of Jersey. The US Ambassador to the UK, HE Matthew Barzun, signed on behalf of the Government of the USA.
Senator Gorst said: “The signing of this agreement is further evidence of Jersey's full commitment to the fight against tax evasion, and of our support of current international initiatives enhancing transparency and exchange of information for tax purposes. The OECD, at the request of the G20, is developing a single global standard for automatic exchange of information based on the US FATCA model and Jersey is also actively engaged in this process.”
Treasury and Resources Minister, Senator Philip Ozouf, said: “This agreement with the USA is of great importance for the many financial institutions in the Island with US interests. It will further strengthen the existing business relationships and will ensure that both existing and new business can be fostered free of the threat of the US 30% withholding tax, which would have otherwise been applied.”
Geoff Cook, CEO, Jersey Finance Limited, commented:
“The signing of this agreement gives Jersey's finance industry, and its underlying clients, a great deal of added certainty in Jersey and its position in relation to tax compliance and reporting to the USA. As well as clarifying that clients with US interests will not be liable for US withholding taxes, the agreement also reinforces Jersey's existing business relationships with the USA, with whom Jersey signed a Tax Information Exchange Agreement in 2002, and helps strengthen Jersey's reputation in key overseas markets.
“More widely, the signing of this milestone agreement, together with the recent agreement with the UK and active participation in developing global standards of automatic exchange of information, provides further evidence of Jersey's full commitment to the fight against tax evasion, and leaves no doubt of the key role Jersey continues to play in international initiatives to improve tax compliance and enhance transparency.”
After the signing of the agreement with the USA, which follows the signing of a similar agreement with the UK, the next step will be to issue guidance notes covering both agreements, on which the finance industry will be consulted. The States of Jersey will also be asked to ratify the agreements and make the necessary Regulations to bring them into effect.
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