Country-by-Country Reporting Regulations | KPMG | QM

Jersey publishes its draft Country-by-Country Reporting Regulations

Country-by-Country Reporting Regulations

The Chief Minister’s Department issued a public consultation on the Introduction of Country-by-Country Reporting (“CbCR”) in January 2016.

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Reports

Following response to the consultation in April 2016, the Government of
Jersey has now published draft regulations for purposes of implementing the
CbCR for the accounting periods beginning on or after 1 January 2016.

Draft Taxation (Implementation) (International Tax Compliance) (Country-by Country Reporting: BEPS) (Jersey) Regulations 201-, is evidence of Jersey’s commitment to implementing one of the four minimum standards (country-by-country reporting) required of a BEPS Associate such as Jersey.

Jersey is expected to sign a Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports later this month. The agreement will set out requirements for filing and exchange of information for tax purposes to enable implementation of the “Transfer Pricing Documentation and Country-by-Country Reporting – Action 13: 2015 Final Report”. 

We highlight below, the salient features of the draft regulations:

 

Reporting obligations

 

Broadly, a CbCR is required to be filed with the Comptroller of Taxes by the ultimate parent entity of an MNE Group that has total consolidated group revenues of EUR 750M if the entity is resident in Jersey. 

Furthermore, a Jersey entity which is not itself an ultimate parent entity of an MNE Group that has local consolidated group revenues of EUR 750M or more may be required to file a Jersey CbCR by the filing deadline if:

  • its ultimate parent entity is not required to file the equivalent of a CbCR in its jurisdiction of tax residency for the accounting period in question;
  • the appropriate authority of the jurisdiction in which the ultimate parent entity is tax resident has not entered into exchange agreements with the Comptroller
    in respect of the accounting period to which the report relates; or
  • the appropriate authority of the jurisdiction in which the ultimate parent entity has filed a CbCR and has entered into exchange agreements with the Comptroller but such arrangements are not operating effectively.

The Jersey entity is required to notify the Comptroller on or before the last day of its accounting period of its intention to file any CbCR in respect of its accounting period.

  • where an entity within the Jersey Group intends to file a CbCR with the Comptroller and the Jersey entity provides the Comptroller with details of that other entity
  • where a Group entity intends to file a CbCR in another jurisdiction. This exception will only apply if the appropriate authority of the jurisdiction in which the other entity is filing the report has entered into exchange arrangements with the Comptroller regarding the filed report. The Jersey entity is required to provide the
    Comptroller with details of the other entity, its tax residence and
    jurisdiction in which the report would be filed.

 

Offences and penalities

 

The regulations propose a penalty regime in line with those in operation relating to the regulations which give effect to the Common Reporting Standard (“CRS”) and FATCA.

 

Other considerations

 

The Comptroller is empowered to enter business premises and examine and take copies of business documents for purposes of enforcing compliance with the country-by-country regulations.

In addition to this, the regulations also pre-empt the use of anti-avoidance schemes in order to avoid taxation thus any arrangements entered into by a person for purposes of avoiding any requirement of the regulations will be deemed null and void. 

View a copy of the draft regulations

© 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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