Jersey has signed a Foreign Account Tax Compliance Act (Fatca) agreement with the UK - a move which has prompted concerns over the future attractiveness of Jersey as a financial centre.
The agreement is consistent with agreements the UK recently struck with Guernsey and the Isle of Man in a bid to combat tax evasion.
The deal comprises an information exchange agreement similar to the inter-government agreement that the island is negotiating with the US; an alternative reporting arrangement for UK resident but non-domiciled individuals; a disclosure facility to enable UK taxpayers to regularise any affairs in Jersey; alongside discussions to renegotiate the existing Double Taxation Arrangement with the UK.Commenting on the package Heather Bestwick, the deputy chief executive of Jersey Finance, said the agreement 'reflects Jersey's strong relationship with the UK and the islands' international reputation for high standards of regulation'.
Bestwick said the deal was the result of an extensive consultation process Jersey Finance on behalf of the goverment and its member firms
'One of the key benefits of this announcement is the degree of certainty that it offers the industry and our focus from this point forward will be to continue to work closely with government on the detail of each element of the agreed package and to support our members in quickly and clearly communicating these measures to Jersey’s global financial services client base,' Bestwick said.
Commenting on the agreement, KPMG welcomed the agreement but warned of challenges to the attractiveness of Jersey's financial sector
'This is a significant and important development in Jersey’s international reputation and status as a mainstream international finance centre and one that KPMG welcomes, especially alongside the similar agreement with the US. That said, it seems likely, as with US FATCA, that the practical implementation of the agreement will present challenges to Jersey financial service businesses. They will need to understand the operational implications and to communicate with their clients on what this means for them,' it said.