Policy & Resources Committee - P.2019/131
The States are asked to decide:-
Whether, after consideration of the Policy Letter entitled "International Tax Measures - Miscellaneous Amendments to the Income Tax Legislation" dated 8th November, 2019, they are of the opinion:-
That the Income Tax (Guernsey) Law, 1975, as amended ("the Law"), and regulations thereunder, should be revised to:
1. Provide the Revenue Service with the power to undertake onsite visits in respect of business premises from which a person is or may be operating, for the purposes of reviewing compliance with the Common Reporting Standard ("CRS") and any other matters relating to income tax or international tax measures;
2. Place a requirement for all financial institutions, operating in Guernsey, to register with the Revenue Service and, when doing so, detailing their classification for the purposes of CRS and the Foreign Account Tax Compliance Act ("FATCA");
3. Enable the Revenue Service to issue a notice to a financial institution to complete corrective remedial actions, related to CRS and/or FATCA reporting and in the case of significant non-compliance to be required at its own cost to appoint a suitably qualified independent person for the purposes of determining the full extent of the non-compliance, overseeing the repair, validating that the corrective measures have moved the financial institution into a compliant position, and making a relevant disclosure to the Revenue Service confirming this position;
4. Require financial institutions to report to the Revenue Service all account holders where they have been unable to obtain valid self-certification for the purposes of CRS and/or FATCA due diligence procedures. To then enable the Revenue Service to serve a notice to the financial institution to require them to freeze the account, until such time as the accountholder provides valid self-certification;
5. Amend section 193 of the Law (as modified in the relevant CRS and FATCA Regulations) to make it clear these penalties are applied only in respect of the late filing of reports;
6. Amend the provisions contained within section 193(1) and section 200 of the Law, to make it clear that where a person has failed to deliver a return, other than a return of income, by the filing deadline, the Revenue Service may automatically impose a penalty, without the requirement to issue a notice stating the grounds of their belief and providing the person with a reasonable opportunity to state their case (without prejudice to the person's right of appeal);
7. Enable the Revenue Service to impose increased levels of daily penalties, in the exceptional cases where a person continues for more than 30 days after the imposition of the original penalty not to meet any of its reporting or filing obligations under the Law;
8. Enable the Revenue Service to impose specific penalties for the submission of CRS/FATCA returns which are incorrect or incomplete in a material particular where the maximum penalty to be imposed is based on a percentage of the balance or value of accounts, that were not reported;
9. Amend section 190 of the Law so that where a company fails to deliver a return of income within the filing deadline, the current maximum penalty of £50 where the company, for example, has no income or profits in the period for which the return is required will no longer apply;
10. make necessary amendments to the Income Tax (Guernsey) Law, 1975, in order to be able to implement the provisions of the Assistance in Collection Article contained in the Double Taxation Agreement between Guernsey and the United Kingdom.
That the Policy & Resources Committee be instructed to:
1. make Regulations, to be laid before the States, in accordance with section 75CC of the Law, to implement the Mandatory Disclosure Rules relating to CRS Avoidance Arrangements and Opaque Offshore Structures, as published by the OECD; and
That -
(l) the MDR shall, in accordance with section 75CC(1C) of the Income Tax (Guernsey) Law, 1975, be specified for the purposes of that Law as an international tax measure (the provisions of which may accordingly be implemented by regulations of the Policy & Resources Committee under section 75CC(1A) of that Law).
To direct the preparation of such legislation as may be necessary to give effect to the above proposals.
