Volaw Trust v Comptroller of Taxes  JRC095
The first ever appeal against a notice to disclose information under a TIEA has been rejected by the Royal Court.
Of particular importance was that the Court decided:
- the Jersey Comptroller of Taxes must have reasonable grounds for believing: (i) that a taxpayer may have failed to comply, or may fail to comply, with a domestic law of a third country concerning tax; and (ii) that any such failure has led, or is likely to lead to serious prejudice to the proper assessment or collection of tax; and be able to properly say that in his "reasonable opinion" the information sought is relevant. In this case the Comptroller did have reasonable grounds and could form a reasonable opinion as to relevance.
- if "criminal tax matters" are under investigation
(and this is a term of art), a request can be made for the
production of information which pre-dates the TIEA and, because the
TIEA is not limited to the use such information can thereafter be
put, the information could also be used to conduct a civil tax
assessment which would not otherwise be possible;
- in this case there was not enough to justify a conclusion that the foreign authorities were acting in bad faith and undertaking a "fishing expedition" into the tax affairs of the foreign resident; the Court would need compelling evidence before making such a finding.
On the basis that the Comptroller is required to act reasonably in all the circumstances, rather than come to definitive conclusions, the court has in effect confirmed that it will be very difficult to mount a successful challenge against disclosures to foreign authorities. International transparency is the order of the day.
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