The Channel Island of Jersey, which has a population of only around 100,000, has become the world’s latest jurisdiction to unveil a tax amnesty – joining the ranks of countries around the world that have moved to take advantage of the threat that a soon-to-take-effect system for automatic exchange of information poses for those who have undeclared financial assets.
In a statement posted today on Jersey’s Gov.je website, the island’s Treasury provides details of the new scheme, which is due to run until the end of this year.
“This means islanders will be able to tell the Taxes Office if they’ve made a mistake or failed to declare income on their tax return without having to pay any extra penalties,” the statement explains.
Individuals and businesses that make a disclosure are still obliged to pay the tax that’s owing, “but the Comptroller of Taxes will not apply any penalties or interest, and his general position will be not to instigate criminal proceedings,” the statement continues.
A 10% late payment surcharge, however, may be applied, “if it is chargeable by law”.
Jersey announced last October that it was planning to introduce a tax amnesty. This was unveiled alongside news of a new “get tough” policy, which it said included plans to “strengthen” penalties levied on tax dodgers found to be living in the island.
‘Deliberate’ omissions accepted
Jersey minister for Treasury and Resources Alan Maclean said in today’s statement that the disclosure opportunity would allow individuals and businesses to come forward and make a voluntary disclosure, even if they had ” deliberately omitted income from their tax returns”, or “made a claim for allowances they weren’t entitled to”.
“I know tax can be a complicated subject for many, but if we want to keep our taxes low, then it’s important that everyone pays what they owe,” he added.
As reported, the Common Reporting Standard is the OECD’s global response to the US information reporting programme known as FATCA (Foreign Account Tax Compliance Act), and currently has more than 100 countries committed to automatically exchanging information, beginning this year for some, next year for others.
Other countries that have also introduced tax amnesties ahead of the CRS have included Indonesia, Argentina, Brazil, Ireland, and Mexico.
Further information on the Jersey tax amnesty may be found on the Gov.je website, or by calling a dedicated phone number: +44 (0) 1534 440004.
To read the thoughts of Jersey Finance chief executive Geoff Cook on the Common Reporting Standard, published here last month, click here.