News of the consultation comes less than two weeks after the Isle of Man announced that it was close to signing a “mini FATCA” agreement with the UK, and has also announced that a new IoM tax disclosure facility with the UK, to be launched in April.
The Jersey Finance consultation period will last for three weeks, until 15 March, Jersey Finance said in a statement today.
The move comes as financial services institutions in Jersey, as elsewhere outside the US, have been preparing for the implementation of the US Foreign Account Tax Compliance Act (FATCA), which was signed into law in 2010 and intended to crack down on US citizens who make use of overseas accounts to avoid their US tax obligations.
Under US law, Americans are obliged to pay tax on their worldwide income, regardless of where it originates, or where they live. Although there has been a fierce international backlash to FATCA, particularly by non-US financial institutions and expatriate Americans, some experts have been saying almost from the beginning that other countries were likely to consider copying it, as they struggle to deal with their own problems of tax avoidance and evasion by their citizens.
‘Important, complex’
Jersey Finance chief executive Geoff Cook said the idea of a FATCA-type of agreement with the UK was “an important and complex matter” that needed to be developed and agreed “by a process of constructive consultation between all parties”.
“It is our view that considerable work is still required to find a solution that meets the long-term needs of the UK, while at the same time avoiding the very real risks of disproportionate costs in terms of implementation and compliance, as well as any unintended consequences that might unduly harm the international competiveness of Jersey and other centres that form the Crown Dependencies and Overseas Territories,” Cook added.
“We are encouraged that representatives of the Jersey government are continuing discussions with their UK counterparts and, in particular, that they are highlighting the need to promote automatic exchange of information worldwide, on a level playing field basis.”
Jersey Finance said it has sent details of the consultation process to all Jersey Finance member firms, which, it noted, have been invited to either respond directly to the States of Jersey, or to submit their comments to Jersey Finance for inclusion in a broader industry response.
