Policy & Resources Committee - P.2016/42
The States are asked to decide:-
Whether they are of the opinion to approve the draft Ordinance entitled "The Income Tax (Guernsey) (Amendment) Ordinance, 2016", and to direct that the same shall have effect as an Ordinance of the States.
This proposition has been submitted to Her Majesty's Procureur for advice on any legal or constitutional implications in accordance with Rule 4(1) of the Rules of Procedure of the States of Deliberation and their Committees.
This Ordinance amends the Income Tax (Guernsey) Law, 1975 ("the 1975 Law") as follows -
(a) clauses 2, 3, 4 and 5 modify sections 51 and 51A of the 1975 Law to provide that a person who is non-resident, or resident but not solely or principally resident, is entitled to 1/52nd of the personal income tax allowances for each 7 days that they are in receipt of a Guernsey Old Age Pension,
(b) clause 6 reinstates section 62AC of the 1975 Law (repealed in 2013 with the deemed distribution regime), thus making it absolutely clear that Guernsey resident beneficial members of exempt companies are only liable to the deduction of tax on distributions made to the exempt company in respect of shares held by it in other companies when the distributions are actually made to them,
(c) clause 7 allows the Director to notify taxpayers in appropriate cases (eg, where all their income is believed to be subject to the deduction of tax at source) that they are not obliged to submit an income tax return. In these cases, the Director makes an assessment on the basis of the information held by him and the taxpayer is deemed to have submitted a return containing the information on which the assessment is based; if the assessment is inaccurate or incomplete, they must give an amendment notice to the Director setting out the omissions or other error, in which case the Director will issue a further notice of assessment,
(d) clauses 8, 9, 10, 11, 12 and 13 modify the provisions of the 1975 Law relating to interim assessments by removing the statutory right of appeal against an interim assessment. However, the taxpayer has a right to make representations to the Director explaining why, having regard to the contents of the interim assessment, collection of the tax due under it should be suspended or deferred in whole or in part pending submission by the taxpayer of a fully completed return of income. The taxpayer then has a right of appeal against a decision of the Director in respect of the suspension or deferral of the tax due. Surcharges arise under section 199AA of the 1975 Law where the suspension or deferral of tax is based on misleading information provided by or on behalf of the taxpayer.
The amendments also crystallise the right of the Director to make a final assessment on an estimated basis where a fully completed return of income is not received within the permitted time. A right of appeal arises in the usual way against such an assessment. In addition, where the Director issues an additional assessment, an appeal against it may only relate to the additional aspects of the assessment, not to information contained in a previous iteration of the assessment the time for appealing against which has expired,
(e) clause 14 makes provision for a "reward scheme" whereby payments may be made by the Director to persons who provide information leading to the recovery of unpaid taxes. A similar scheme is operated in the UK under the Commissioners for Revenue and Customs Act 2005. The administrative details of the scheme will be set out in a statement of practice.