Jersey R & O 3707
Income Tax (Jersey) Laws, 1937 to 1956.
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DOUBLE TAXATION RELIEF (ARRANGEMENT WITH GUERNSEY) (JERSEY) ACT,
1956.
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(Promulgated on the 14th day
of July, 1956).
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STATES OF JERSEY.
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The 11th day of July,
1956.
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WHEREAS it is provided by paragraph (1)
of Article 16B of the Income Tax (Jersey) Law, 1937, as
amended, that, if the States by Act declare that
arrangements specified in the Act have been made with the Government of any
territory outside the Island of Jersey, with a view to affording relief from
double taxation in relation to income tax and any tax of a similar character
imposed by the laws of that territory, and that it is expedient that those
arrangements should have effect, the arrangements shall have effect in relation
to income tax notwithstanding anything in any enactment;
NOW, THEREFORE, THE
STATES, in exercise of the powers
conferred upon them by the said paragraph (1) of Article 16B of the Income Tax
(Jersey) Law, 1937,1
as amended,2
and of all other powers enabling them in that behalf, have made the following
Act: -
1. It
is hereby declared –
(a) that the arrangements
specified in the Arrangement set out in the Schedule to this Act have been made
with the States of Guernsey with a view to affording relief from double
taxation in relation to income tax and taxes of a similar character imposed by
the laws of Guernsey; and
(b) that it is expedient
that those arrangements should have effect.
2. This
Act may be cited as the Double Taxation Relief (Arrangement with Guernsey)
(Jersey) Act, 1956.
SCHEDULE
ARRANGEMENT BETWEEN THE STATES OF
GUERNSEY AND THE STATES OF JERSEY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE
PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
1.-(1) The taxes which are the subject of this
Arrangement are –
(a) In Guernsey:
The income tax (hereinafter referred to as “Guernsey
tax”).
(b) In Jersey:
The income tax (hereinafter referred to as “Jersey
tax”).
(2) This
Arrangement shall also apply to any other taxes of a substantially similar
character imposed in Guernsey or Jersey after this Arrangement has come into
force.
2.-(1) In this Arrangement, unless the context
otherwise requires –
(a) The term
“Guernsey” means any island of the Bailiwick in which the Income
Tax (Guernsey) Law, 1950, or any law amending or replacing that law, is in
force.
(b) The terms “one of
the territories” and “the other territory” mean Guernsey or
Jersey, as the context requires.
(c) The term
“tax” means Guernsey tax or Jersey tax, as the context requires.
(d) The term
“person” includes any body of persons, corporate or not corporate.
(e) The term
“company” includes any body corporate.
(f) The terms
“resident of Guernsey” and “resident of Jersey” mean
respectively any person who is resident in Guernsey for the purposes of
Guernsey tax and not resident in Jersey for the purposes of Jersey tax and any
person who is resident in Jersey for the purposes of Jersey tax and not
resident in Guernsey for the purposes of Guernsey tax; and a company shall be
regarded as resident in Guernsey if its business is managed and controlled in
Guernsey and as resident in Jersey if its business is managed and controlled in
Jersey.
(g) The terms
“resident of one of the territories” and “resident of the
other territory” mean a person who is a resident of Guernsey or a person
who is a resident of Jersey, as the context requires.
(h) The terms
“Guernsey enterprise” and “Jersey enterprise” mean
respectively an industrial or commercial enterprise or undertaking carried on
by a resident of Guernsey and an industrial or commercial enterprise or
undertaking carried on by a resident of Jersey; and the terms “enterprise
of one of the territories” and “enterprise of the other
territory” mean a Guernsey enterprise or Jersey enterprise, as the
context requires.
(i) The term
“industrial or commercial profits” includes rentals in respect of
cinematograph films.
(j) The term
“permanent establishment”, when used with respect to an enterprise
of one of the territories, means a branch, management or other fixed place of
business, but does not include an agency unless the agent has, and habitually
exercises, a general authority to negotiate and conclude contracts on behalf of
such enterprise or has a stock of merchandise from which he regularly fills
orders on its behalf.
An enterprise of one of the territories shall not be deemed to have
a permanent establishment in the other territory merely because it carries on
business dealings in that other territory through a bona fide broker or general
commission agent acting in the ordinary course of his business as such.
The fact that an enterprise of one of the territories maintains in
the other territory a fixed place of business exclusively for the purchase of
goods or merchandise shall not of itself constitute that fixed place of
business a permanent establishment of the enterprise.
The fact that a company which is a resident of one of the
territories has a subsidiary company which is a resident of the other territory
or which is engaged in trade or business in that other territory (whether
through a permanent establishment or otherwise) shall not of itself constitute
that subsidiary company a permanent establishment of its parent company.
(2) Where
under this Arrangement any income is exempt from tax in one of the territories
if (with or without other conditions) it is subject to tax in the other
territory, and that income is subject to tax in that other territory by
reference to the amount thereof which is remitted to or received in that other
territory, the exemption to be allowed under this Arrangement in the
first-mentioned territory shall apply only to the amount so remitted or
received.
(3) In
the application of the provisions of this Arrangement by Guernsey or Jersey,
any term not otherwise defined shall, unless the context otherwise requires,
have the meaning which it has under the laws of Guernsey, or, as the case may
be, Jersey, relating to the taxes which are the subject of this Arrangement.
3.-(1) The industrial or commercial profits of
a Guernsey enterprise shall not be subject to Jersey tax unless the enterprise
is engaged in trade or business in Jersey through a permanent establishment
situated therein. If it is so engaged, tax may be imposed on those profits by
Jersey but only on so much of them as is attributable to that permanent
establishment.
(2) The
industrial or commercial profits of a Jersey enterprise shall not be subject to
Guernsey tax unless the enterprise is engaged in trade or business in Guernsey
through a permanent establishment situated therein. If it is so engaged, tax
may be imposed on those profits by Guernsey, but only on so much of them as is
attributable to that permanent establishment.
(3) Where
an enterprise of one of the territories is engaged in trade or business in the
other territory through a permanent establishment situated therein, there shall
be attributed to that permanent establishment the industrial or commercial
profits which it might be expected to derive from its activities in that other
territory if it were an independent enterprise engaged in the same or similar
activities under the same or similar conditions and dealing at arm’s
length with the enterprise of which it is a permanent establishment.
(4) No
portion of any profits arising from the sale of goods or merchandise by an
enterprise of one of the territories shall be attributed to a permanent
establishment situated in the other territory by reason of the mere purchase of
the goods or merchandise within that other territory.
4. Where
–
(a) an enterprise of one of
the territories participates directly or indirectly in the management, control
or capital of an enterprise of the other territory, or
(b) the same persons
participate directly or indirectly in the management, control or capital of an
enterprise of one of the territories and an enterprise of the other territory,
and
(c) in either case
conditions are made or imposed between the two enterprises, in their commercial
or financial relations, which differ from those which would be made between
independent enterprises,
then any profits which would but for these conditions have accrued
to one of the enterprises but by reason of those conditions have not so accrued
may be included in the profits of that enterprise and taxed accordingly.
5. Notwithstanding
the provisions of paragraphs 3 and 4, profits which a resident of one of the
territories derives from operating ships or aircraft shall be exempt from tax
in the other territory.
6.-(1) Remuneration, including pensions, paid
by the Government of one of the territories to any individual for services
rendered to that Government in the discharge of governmental functions shall be
exempt from tax in the other territory if the individual is not ordinarily resident
in that other territory or (where the remuneration is not a pension) is
ordinarily resident in that other territory solely for the purpose of rendering
those services.
(2) The
provisions of this paragraph shall not apply to payments in respect of services
rendered in connexion with any trade or business carried on by either of the
Governments for purposes of profit.
7.-(1) An individual who is a resident of
Guernsey shall be exempt from Jersey tax on profits or remuneration in respect
of personal (including professional) services performed within Jersey in any
year of assessment if –
(a) he is present within
Jersey for a period or periods not exceeding in the aggregate 183 days during
that year, and
(b) the services are
performed for or on behalf of a person resident in Guernsey, and
(c) the profits or
remuneration are subject to Guernsey tax,
(2) An
individual who is a resident of Jersey shall be exempt from Guernsey tax on
profits or remuneration in respect of personal (including professional) services
performed within Guernsey in any year of charge if –
(a) he is present within
Guernsey for a period or periods not exceeding in the aggregate 183 days during
that year, and
(b) the services are
performed for or on behalf of a person resident in Jersey, and
(c) the profits or
remuneration are subject to Jersey tax.
(3) The
provisions of this paragraph shall not apply to the profits or remuneration of
public entertainers such as stage, motion picture or radio artists, musicians
and athletes.
8. A
student or business apprentice from one of the territories who is receiving
full-time education or training in the other territory shall be exempt from tax
in that other territory on payments made to him by persons in the
first-mentioned territory for the purposes of his maintenance, education or
training.
9.-(1) Subject to the provisions of the law of
Guernsey regarding the allowance as a credit against Guernsey tax of tax
payable in a territory outside Guernsey, Jersey tax payable, whether directly
or by deduction, in respect of income from sources within Jersey, shall be
allowed as a credit against any Guernsey tax payable in respect of that income.
(2) Subject
to the provisions of the law of Jersey regarding the allowance as a credit
against Jersey tax of tax payable in a territory outside Jersey, Guernsey tax
payable, whether directly or by deduction, in respect of income from sources
within Guernsey, shall be allowed as a credit against any Jersey tax payable in
respect of that income.
(3) For
the purposes of this paragraph, profits or remuneration for personal (including
professional) services performed in one of the territories shall be deemed to
be income from sources within that territory, and the services of an individual
whose services are wholly or mainly performed in ships or aircraft operated by
a resident of one of the territories shall be deemed to be performed in that
territory.
10.-(1) The taxation authorities of Guernsey and
Jersey shall exchange such information (being information available under their
respective taxation laws) as is necessary for carrying out the provisions of
this Arrangement or for the prevention of fraud or the administration of
statutory provisions against legal avoidance in relation to the taxes which are
the subject of this Arrangement. Any information so exchanged shall be treated
as secret and shall not be disclosed to any persons other than those concerned
with the assessment and collection of the taxes which are the subject of this
Arrangement. No information shall be exchanged which would disclose any trade
secret or trade process.
(2) As
used in this paragraph, the term “taxation authorities” means the
Administrator of Income Tax or his authorized representative in the case of
Guernsey and the Comptroller of Income Tax or his authorized representative in
the case of Jersey.
11. This
Arrangement shall come into force on the date on which the last of all such
things shall have been done in Guernsey and Jersey as are necessary to give the
Arrangement the force of law in Guernsey and Jersey respectively and shall
thereupon have effect –
(a) In Guernsey :
for any year of charge, beginning on the first day of January,
1956, and subsequent years.
(b) In Jersey :
for any year of assessment, beginning on the first day of January,
1956, and subsequent years.
12. This
Arrangement shall continue in effect indefinitely but either of the Governments
may, on or before the 30th day of June in any calendar year after the year 1957
give notice of termination to the other Government and, in such event, this
Arrangement shall cease to be effective –
(a) In Guernsey :
for any year of charge, beginning on or after the first day of
January in the calendar year next following that in which such notice is given.
(b) In Jersey :
for any year of assessment, beginning on or after the first day of
January in the calendar year next following that in which such notice is given.
To be printed, published and posted.
F. DE
L. BOIS,
Greffier of the States.