Jersey: Jersey’s First Challenge Against Disclosure Under A Tax Information Exchange Agreement

Last Updated: 5 July 2013
Article by David Dorgan

[Volaw Trust v Comptroller of Taxes [2013]JRC095]

The Royal Court of Jersey has dismissed the first appeal against a decision of the Jersey Comptroller of Taxes ("Comptroller") to serve notice pursuant to a Tax Information Exchange Agreement ("TIEA") requiring the production of certain information relevant to the tax affairs of a foreign resident.


In 2010, the Comptroller, having received a request from foreign authorities, issued a formal notice to Volaw Trust requiring it, pursuant to regulation 3 of the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 ("Regulations"), to furnish "all information, documents, correspondence, financial statements, files and details of any other information concerned with or connected to the named subjects" (being an individual and four companies).

Grounds for Appeal

Whilst there is somewhat of a convoluted history to the issue of the notice by the Comptroller, the main issues on appeal before the Royal Court were as follows:

  1. Can a foreign authority obtain information which pre-dates the TIEA?
  2. Was the threshold, set out in the Regulations for requiring the production of that information, met?
  3. Was the scope of the Comptroller's notice excessive extending to documents not requested by the foreign authorities?
  4. Was the purpose for which the information sought relevant and within the scope of the TIEA (i.e. this is a fishing expedition to enable the foreign authority to undertake a civil tax assessment)?

Decisions of the Court

1 Obtaining Information Pre-Dating TIEA

Upon interpretation of the TIEA, it was clear to the Royal Court that if information relates to criminal tax matters, but not otherwise, a foreign authority can obtain information which pre-dates the TIEA; the TIEA's terms making a distinction between the date on which the TIEA "enters force" and the periods of time which its provisions "have effect". On this basis, if the criminal criteria is satisfied, a request can be made for the production of pre-TIEA information 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 the case

2 Threshold

The Regulations require the Comptroller, not to reach any final conclusion on where the truth lies, but, having regard to the material before him, to:

  1. have reasonable grounds for believing:

    1. that a taxpayer may have failed to comply, or may fail to comply, with a domestic law of a third country concerning tax; and
    2. that any such failure has led, or is likely to lead to serious prejudice to the proper assessment or collection of tax; and
  2. properly say that in his "reasonable opinion" the information sought is relevant.

In this case, the Royal Court was entirely satisfied that the Comptroller had such reasonable grounds (noting that the individual in question had been subject to an indictment, which had proceeded to trial, for breaches of his domestic tax laws).

Furthermore, the Royal Court noted that the Comptroller had "very good grounds for believing" that the foreign tax authority's suspicions were well founded and that the individual's interests in, at least, some of the companies, and the transactions in question, were more extensive, or different, from what he would have the outside world believe.

3 Scope of Notice

The Royal Court found, that whilst the request by the foreign authorities to the Comptroller did not describe the required documents in quite a clear manner, on a "fair reading it was obvious" what was being asked and "equally obvious from the course of events subsequent to the Request that...this... was and is at the heart of the dispute."

4 Relevance of Information Sought / A Fishing Expedition

It was contended that the real reason for the request by the foreign authorities was to be able to conduct a civil tax assessment, not alleged criminal offences, by "giving the impression" that a civil assessment of tax was necessary for the purpose of a criminal prosecution. Consequently, there was an assertion of "bad faith" by the foreign authorities. The Royal Court reviewed the totality of correspondence in the matter and concluded as follows:

  1. whilst their command of the English language was impressive, the foreign authorities do not always express themselves in quite the way that a native user of the language might and, therefore, there did not, of itself, appear to be an attempt to mislead;
  2. it was plain that there was genuine difficulty and confusion on both sides: on the Jersey side in trying to understand exactly how the unfamiliar foreign system worked and, on the foreign side, in endeavouring to explain their system;
  3. that, whilst the foreign authorities did not emphasise the practical importance to their criminal prosecution process of having a tax assessment, there was nothing sufficient to justify a conclusion of bad faith on their part; and
  4. there would have to be compelling evidence available before the Court would be justified in making a finding of bad faith.

Comment: Whilst a landmark case providing helpful guidance as to the practical effect of the Regulations and TIEAs, it cannot read as representing the position in all cases. Whilst TIEAs follow a form set down by the OECD, but not all TIEAs will have identical terms. More importantly, the Comptroller's decision whether or not to issue notice for disclosure will be entirely conditional upon circumstances as to whether reasonable grounds exist and he can form a reasonable opinion that disclosure is relevant.

However, it is worth noting that, due to the nature of the facility afforded by any TIEA, much will probably still be unknown to the requesting foreign authorities who will likely to be undertaking an investigation at the time of a request. Consequently, there is a practical limit as to how much specific detail a foreign authority can realistically be expected to provide to the Comptroller. Therefore, much will depend upon the Comptroller's reasonableness as he is not required to reach definitive conclusions.

On this basis, it would seem sensible to assume that further challenges against disclosures to foreign authorities will be forthcoming and, in that regard, it will be interesting to see how the law develops in this area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions