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After a statement from the Jersey Government that it does not wish to host promoters of abusive tax avoidance schemes to UK participants, Jersey promoters will be required, from October 1, 2014, to inform the Financial Services Commission of any schemes falling under the ambit of the UK's Disclosure of Tax Avoidance Scheme (DOTAS) regime.
Chief Minister Ian Gorst and the Treasury Minister Philip Ozouf recently issued a joint statement on the matter: "We support fair tax competition, and view legitimate tax planning as an appropriate response to operating cross-border. We do not support that which goes beyond legitimate tax planning for commercial purposes nor do we want our service providers to host abusive tax schemes designed to frustrate the will of national parliaments. Although it is for the UK Parliament to determine the extent to which UK residents are able to engage in lawful tax avoidance, given that Jersey does not wish to be associated with abusive tax schemes and in the spirit of being a good neighbor, we want to support the UK in achieving their ambitions in relation to that which we consider to be unacceptable."
"With effect from October 1, 2014, we expect service providers to ensure that they identify if any new business they take on will facilitate the use by their client of a tax avoidance scheme registered under DOTAS, or are of the view that they are involved in a transaction which forms part of a scheme which has a DOTAS reference number, and document this accordingly (including confirmation of compliance with DOTAS reporting requirements) as part of their business take-on procedures... To assist in the effective implementation of these actions we have been working with HMRC to ensure providers do not contravene HM Revenue and Customs's DOTAS rules and to consider what information would be of assistance in identifying and responding to abusive tax planning schemes with which Jersey may have some involvement. Jersey will work closely with HMRC going forward to identify ways in which we can better collaborate with them on tax information exchange on complex international tax avoidance and structures."
The decision has been welcomed by Jersey Finance – the promotional agency for the island's financial services industry internationally. Its chief executive Geoff Cook said: "The Jersey government has this week outlined a package of measures designed to reinforce the policy position that Jersey does not welcome abusive tax planning structures."
"We welcome these proactive, forward thinking measures by Jersey's government in respect of abusive tax schemes, and support their announcement that they are working more closely with HMRC to ensure Jersey based providers are in compliance with DOTAS rules."
"Jersey's finance industry can already clearly demonstrate its track record as a cooperative, transparent and well regulated international finance center, but in a political environment where there is increasing momentum to act against abusive tax avoidance, it is entirely appropriate for Jersey to show its commitment to that process."
"Jersey Finance will be undertaking a consultation with industry in due course in relation to the issue of guidance notes that will support the introduction of these measures, and to expand on the principles advocated in the measures outlined. Details of the consultation will be available soon and I would ask as many members as possible to engage with this process."
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