Taxation
(Implementation) (International Tax Compliance) (Country-by-Country Reporting:
BEPS) (Jersey) Regulations 2016
THE STATES, in pursuance of Article 2
of the Taxation (Implementation) (Jersey) Law 2004, and following the decision of the States
taken on the day these Regulations are made to ratify the Multilateral
Competent Authority Agreement on the Exchange of Country-by-Country Reports,
have made the following Regulations –
Commencement [see endnotes]
1 Interpretation[1]
In these Regulations, unless the context otherwise
requires –
“1961 Law” means the Income Tax (Jersey) Law 1961;
“authorized person” means the Comptroller or any person
authorized by the Comptroller to perform the functions under
Regulation 17;
“business document” means any document –
(a) that
relates to the carrying on of a business, trade, profession or vocation by any
person; and
(b) that
forms part of any record under any enactment;
“business premises” means premises used in connection
with the carrying on of a business, trade, profession or vocation;
“CBC report” means a country-by-country report or a
Jersey country-by-country report;
“Commission” means a Commission of Appeal constituted
under Regulation 13(3);
“Comptroller” means the Comptroller of Revenue;
“consolidated financial statements” has the same meaning
as it does in Article 1(12) of the OECD model legislation if such
statements are prepared in accordance with generally accepted accounting
practice or international accounting standards;
“constituent entity” has the same meaning as it does in Article 1(4)
of the OECD model legislation;
“country-by-country report” has the meaning given by
Regulation 2(1);
“exchange arrangements” means arrangements to exchange
country-by-country reports or their equivalent;
“file”, except where stated otherwise in relation to
filing in a jurisdiction outside Jersey, means file with the Comptroller;
“filing deadline” means 12 months after the end of
the accounting period to which a CBC report relates;
“Jersey country-by-country report” has the meaning given
by Regulation 2(2);
“Jersey entity” has the meaning given by
Regulation 3;
“MNE group” has the same meaning as it does in Article 1(2)
of the OECD model legislation except that Article 1(2)(ii)
(“Excluded MNE Group”) does not apply;
“OECD Final Report” means the document entitled
“Transfer Pricing Documentation and Country-by Country
Reporting – Action 13: Final Report” published by the
Organisation for Economic Co-operation and Development as part of the OECD/G20
Base Erosion and Profit Shifting Project;
“OECD model legislation” means the “Model
legislation related to Country-by-Country Reporting” in Annex IV to
Chapter V of the OECD Final Report;
“ultimate parent entity” has the same meaning as it does
in Article 1(6) of the OECD model legislation.
2 Meaning
of “country-by-country report” and “Jersey country-by-country
report”
(1) For the purpose of
these Regulations, “country-by-country report” with respect to an
MNE Group means a report which contains the information referred to in Article 4(1)
of the OECD model legislation set out in a form which conforms with the model
template in Annex III of the OECD Final Report and the general and
specific instructions set out in that Annex.
(2) For the purpose of
these Regulations “Jersey country-by-country report” means a report
within the meaning of paragraph (1) but only as it applies to –
(a) a
Jersey entity; and
(b) where
applicable, the constituent entities in respect of which the Jersey entity is
required to prepare consolidated financial statements or would be so required
if its equity interests were traded on a public securities exchange.
3 Meaning
of “Jersey entity”
(1) For the purpose of
these Regulations, “Jersey entity” (“JE”) means a
constituent entity in respect of which conditions A and B are satisfied.
(2) Condition A is
satisfied where JE –
(a) is
resident in Jersey for tax purposes; or
(b) has a
permanent establishment in Jersey.
(3) Condition B is
satisfied where there is no other constituent entity of the
MNE Group –
(a) resident
in Jersey for tax purposes; or
(b) which
has a permanent establishment in Jersey,
and which is required to prepare consolidated financial statements
or would be so required if its equity interests were traded on a public
securities exchange and such statements include or would include JE.
4 Meaning
of “threshold requirement”
(1) In Regulation 5,
“threshold requirement” means that the MNE Group has a total
consolidated group revenue of €750 million or more for an accounting
period of 12 months –
(a) as
shown in its consolidated financial statements; or
(b) as
would have been shown in its consolidated financial statements had the MNE
Group been required to produce them by reason of the trading of equity
interests in any of the enterprises in the MNE Group on a public
securities exchange.
(2) Where an MNE group
draws up, or would draw up, its consolidated financial statements for an
accounting period in a currency other than euros, the reference to
“€750 million” in paragraph (1) has effect as if it
referred to the equivalent in that currency at the average exchange rate for
the accounting period.
(3) When the accounting
period of an MNE Group is a period of less than 12 months, the amount of
€750 million in paragraph (1) (or the equivalent under paragraph (2))
is reduced proportionately.
5 Filing
of CBC reports
(1) This Regulation applies
where an MNE Group (“G”) meets the threshold requirement in respect
of an accounting period (“AP”) where AP –
(a) commences
before and ends on or after 31st December 2015; or
(b) commences
on or after 1st January 2016.
(2) The accounting period
immediately following AP is referred to in this Regulation as
“AP+1”.
(3) The ultimate parent
entity of G must file a country-by-country report in respect of AP+1 by the
filing deadline if the ultimate parent entity is resident in Jersey for tax
purposes on the date of the filing deadline.
(4) Subject to paragraph (5),
a Jersey entity of G must file a Jersey country-by-country report by the filing
deadline in respect of AP+1 if –
(a) the
Jersey entity is not required to file a country-by-country report under paragraph (3);
and
(b) one
of the conditions in Regulation 6 is met.
(5) The duty in paragraph (4)
does not apply if exception A or exception B applies.
(6) Exception A
applies where –
(a) a
constituent entity of G intends to file before the filing deadline a
country-by-country report pursuant to paragraph (8) in respect of AP+1 and
that report is intended to include the information required to be contained in
the Jersey country-by-country report otherwise required to be filed by the
Jersey entity under paragraph (3); and
(b) on or
before the last day of AP+1, the Jersey entity provides to the Comptroller
details of the identity of the constituent entity which will file the report.
(7) Exception B
applies where –
(a) a
constituent entity of G intends to file before the filing deadline in a
jurisdiction other than Jersey the equivalent of a country-by-country report in
respect of AP+1 and that report is intended to include the information required
to be contained in the Jersey country-by-country report otherwise required to
be filed by the Jersey entity under paragraph (3);
(b) the
appropriate authority of that jurisdiction has entered into exchange
arrangements with the Comptroller which apply to the filed report and the
Comptroller has not notified the Jersey entity before the filing deadline that
the arrangements are not operating effectively; and
(c) on or
before the last day of AP+1 the Jersey entity provides details to the
Comptroller of –
(i) the identity of
the constituent entity which intends to file the report and where it is
resident for tax purposes, and
(ii) the
jurisdiction in which the report is to be filed.
(8) A constituent entity of
G (“CEG”) may file a country-by-country report on behalf of G in
respect of AP+1 if –
(a) CEG
or another constituent entity of G is resident for tax purposes in Jersey or
has a permanent establishment in Jersey;
(b) CEG –
(i) is not required
to file a country-by-country report under paragraph (3), and
(ii) is
authorized by the ultimate parent entity of G to file a country-by-country
report on behalf of G in respect of AP+1 and the ultimate parent entity has
notified the Comptroller of that authority in writing on or before the last day
of AP+1; and
(c) one
of the conditions in Regulation 6 is met.
(9) A Jersey entity must,
whether or not required to do so by another provision in this Regulation,
notify the Comptroller on or before the last day of AP+1 of its intention to
file any CBC report in respect of AP+1.
6 Conditions
for the purposes of Regulation 5(4)(b) and (8)(c)
The conditions referred to in Regulation 5(4)(b) and (8)(c) are
that –
(a) the ultimate parent entity
is not required to file the equivalent of a country-by-country report in the
jurisdiction in which it is resident for tax purposes in respect of the
accounting period to which the report relates (or, where the ultimate parent
entity is resident for tax purposes in more than one jurisdiction, no such
requirement to file applies in any of those jurisdictions);
(b) the appropriate
authority of the jurisdiction in which the ultimate parent entity is resident
for tax purposes has not entered into exchange arrangements with the
Comptroller in respect of the accounting period to which the report relates (or
where the ultimate parent entity is resident for tax purposes in more than one
jurisdiction, none of the appropriate authorities of those jurisdictions has
entered into such arrangements); or
(c) the appropriate
authority of the jurisdiction in which the ultimate parent entity has filed the
equivalent of a country-by-country report has entered into exchange
arrangements with the Comptroller but –
(i) in
respect of the obligation on a Jersey entity in Regulation 5(4), the
Comptroller has notified the Jersey entity that the arrangements are not
operating effectively, or
(ii) in
respect of a CEG intending to file a country-by-country report further to
Regulation 5(8), the CEG has requested the Comptroller to confirm whether
or not the arrangements are operating effectively and the Comptroller has
indicated that they are not.
7 Penalty
for failure to comply with Regulations
A person is liable to a
penalty of £300 if the person fails to comply with Regulation 5(3),
5(4) or 5(9).
8 Daily
default penalty
If –
(a) a
penalty under Regulation 7 is imposed for failure to comply with
Regulation 5(3) or 5(4); and
(b) the
failure in question continues after the person has been notified of the
penalty,
the person is liable to a
further penalty, for each subsequent day on which the failure continues, of an
amount (subject to Regulation 14) not exceeding £60 for each day.
9 Penalties
for inaccurate information
(1) A
person is liable to a penalty not exceeding £3,000 if –
(a) a
person provides inaccurate information when filing a CBC report under
Regulation 5; and
(b) condition
A or B is met.
(2) Condition A
is that the person knows of the inaccuracy at the time the information is
provided but does not inform the Comptroller at that time.
(3) Condition B
is that the person –
(a) discovers
the inaccuracy after the information is provided to the Comptroller; and
(b) fails
to take reasonable steps to inform the Comptroller.
10 Matters
to be disregarded in relation to liability to penalties
(1) Liability
to a penalty under Regulation 7, 8 or 9 does not arise if the person
satisfies the Comptroller or (on an appeal notified by the Comptroller to the
Commission) the Commission, that there is a reasonable excuse for the failure
or the provision of inaccurate information.
(2) For
the purposes of this Regulation, neither of the following is a reasonable
excuse –
(a) that
there is an insufficiency of funds to do something; or
(b) that
a person relies upon another person to do something.
(3) If
a person had a reasonable excuse for a failure but the excuse has ceased, the
person is to be treated as having continued to have the excuse if the failure
is remedied without unreasonable delay after the excuse has ceased.
11 Imposition
of penalties
(1) If
a person becomes liable to a penalty under any of
Regulations 7 to 9 the Comptroller may impose the penalty.
(2) If
the Comptroller imposes a penalty, the Comptroller must notify the person.
(3) A
penalty under Regulation 7 or 8 may only be imposed within the period of
6 years beginning with the date on which the person became liable to the
penalty.
(4) A
penalty under Regulation 9 may only be imposed –
(a) within
the period of 12 months beginning with the date on which the inaccuracy
first came to the attention of the Comptroller; and
(b) within
the period of 6 years beginning with the date on which the person became
liable to the penalty.
12 Right
of appeal
against penalty
A person upon whom a
penalty is imposed may appeal against it –
(a) on
the ground that liability to a penalty under any of
Regulations 7 to 9 does not arise; or
(b) as
to the amount of a penalty under Regulation 8 or 9.
13 Commission
of Appeal and procedure on appeal against penalty
(1) Notice
of an appeal under Regulation 12 must be given to the
Comptroller –
(a) in
writing; and
(b) before
the end of the period of 30 days beginning with the date on which
notification to the person under Regulation 11 was given.
(2) The
notice under paragraph (1) must state the ground of appeal.
(3) A
Commission of Appeal under Article 5 of the Revenue
Administration (Jersey) Law 2019 shall be constituted for the purpose of hearing –
(a) an
appeal under Regulation 12; or
(b) an
application under Regulation 14(2).[2]
(4) The
Comptroller shall notify the Commission of an appeal under Regulation 12.
(5) On
determining an appeal under Regulation 12(a) that is notified to the
Commission by the Comptroller, the Commission may confirm or cancel the
penalty.
(6) On
determining an appeal under Regulation 12(b) that is notified to the
Commission by the Comptroller, the Commission may –
(a) confirm
the penalty; or
(b) substitute
another penalty that the Comptroller has power to impose under these
Regulations.
(7) Subject
to this Regulation and Regulation 15, the provisions of Part 6 of
the 1961 Law shall have effect in relation to appeals under
Regulation 12 as they have effect in relation to an appeal against an
assessment to income tax.
14 Increased
daily default penalty
(1) This
Regulation applies if –
(a) a
penalty under Regulation 8 is imposed under Regulation 11;
(b) the
failure in respect of which that penalty is imposed continues for more than 30 days
beginning with the date on which notification of that penalty is given; and
(c) the
person has been notified that an application may be made under this Regulation
for an increased daily penalty to be imposed.
(2) If
this Regulation applies, the Comptroller may make an application to the
Commission for an increased daily penalty to be imposed on the person.
(3) If
the Commission decides that an increased daily penalty should be imposed then
for each applicable day on which the failure continues –
(a) the
person is not liable to a penalty under Regulation 8 in respect of the
failure; and
(b) the
person is liable instead to a penalty under this Regulation of an amount
determined by the Commission.
(4) The
Commission must not determine an amount exceeding £1,000 for each
applicable day.
(5) If
a person becomes liable to a penalty under this Regulation, the Comptroller
must notify the person.
(6) The
notification must specify the future day from which the increased penalty is to
apply.
(7) That
day and any subsequent day is an “applicable day” for the purposes
of this Regulation.
15 Payment
and enforcement of penalties
(1) A
penalty under these Regulations must be paid before the end of the period of
30 days beginning with the date mentioned in paragraph (2).
(2) That
date is the later of –
(a) the
date on which the penalty is imposed under Regulation 11 or notification
under Regulation 14(5) is given in respect of the penalty; or
(b) if
notice of appeal under Regulation 12 is given, the date on which the appeal
is finally determined or withdrawn.
(3) A
penalty under these Regulations may be enforced as if it were income tax
charged in an assessment and due and payable.
16 Anti-avoidance
If –
(a) a
person enters into any arrangements; and
(b) the
main purpose, or one of the main purposes, of the person in entering into those
arrangements is to avoid any requirement of these Regulations,
these Regulations shall
have effect as if the arrangements had not been entered into.
17 Power
to enter business premises and examine business documents
(1) An
authorized person may examine and take copies of any business document that is
located on business premises.
(2) The
power under paragraph (1) may be exercised only for the purpose of
investigating any issue relating to compliance with these Regulations.
(3) An
authorized person may at any reasonable hour enter business premises for the
purpose of exercising the power under paragraph (1).
(4) An
authorized person may by notice require any person to produce any specified business
document at the business premises where the business document is located for
the purpose of enabling the authorized person to exercise the power under paragraph (1)
in relation to that document.
(5) An
authorized person shall not exercise the powers under this Regulation in
respect of any document which a person would, in an action in Court, be
entitled to refuse to disclose or produce on the grounds of legal professional
privilege.
18 Obstructing
an authorized person
(1) A
person shall be guilty of an offence if, without reasonable excuse, the
person –
(a) obstructs
an authorized person in the exercise of the authorized person’s powers
under Regulation 17; or
(b) fails
to provide such reasonable assistance as an authorized person may require when
the authorized person is exercising his or her powers under Regulation 17.
(2) A
person who intentionally alters, suppresses or destroys any business document
that has been specified in a notice under Regulation 17(4) shall be guilty
of an offence.
(3) A
person who is guilty of an offence under paragraph (1) shall be liable to
imprisonment for a term of 6 months and to a fine.
(4) A
person who is guilty of an offence under paragraph (2) shall be liable to
imprisonment for a term of 2 years and to a fine.
19 Citation
These Regulations may be
cited as the Taxation (Implementation) (International Tax Compliance)
(Country-by-Country Reporting: BEPS) (Jersey) Regulations 2016.