The council of ministers have proposed new regulations that will come into effect from 1 January 2015, for the state of Jersey to automatically exchange tax information for EU savings tax agreements.
The regulations will revoke the present retention tax provisions for the savings tax agreements that were entered into in 2005 with the member states of the European Union.
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The aim of EU savings tax directive was to share information between tax authorities on interest paid to individuals so that tax could not be evaded by people from one state saving in another without their home state knowing.
The regulations will also allow those who wish to do so to change over to the automatic exchange of information before it becomes mandatory.
This option has been included in response to the demands of those financial institutions in Jersey that have offices in Guernsey and the Isle of Man and who want to harmonise their systems at the earliest possible date.
Senator Ian Gorst, chief minister, said: "Having regard for the outcome of the European Union Council meeting in June this year, and the call of the G20 Finance Ministers at their meeting in July on all jurisdictions to commit to automatic exchange of information, we consider this is now the right time to announce the proposed change from the retention tax.
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By GlobalData"Also of relevance is that, with the increase in the retention tax rate to 35% in July 2012, a significant majority of those subject to the tax have already taken advantage of the voluntary disclosure option in the agreements."
Semeta, EU Tax Commissioner, said: "Automatic exchange of information has long been a cornerstone in the EU’s fight against tax evasion and is now set to become the international standard. It is the best way of ensuring that every country can collect the revenues it is rightfully due. This will help facilitate fairer and more effective taxation, in Europe and globally."
