Income Tax (Amendment No. 11) (Jersey) Law 1952

Jersey Law 1/1952 INCOME TAX (AMENDMENT No. 11) (JERSEY) LAW, 1952. ____________ A LAW to amend the Law relating to Income Tax and, in particular, to provide for carrying into effect arrangements for the avoidance of double taxation, sanctioned by Order of His Majesty in Council of the 30th day of JANUARY, 1952. (Registered on the 23 rd day of February, 1952 ). ____________ STATES OF JERSEY. ____________ The 18th day of September, 1951. ____________ T HE STATES, subject to the sanction of His Most Excellent Majesty in Council, have adopted the following Law: - ARTICLE 1 Immediately after Article 16 of the Income Tax (Jersey) Law, 1937, 1 as amended, (hereinafter referred to as “the principal Law”) there shall be inserted the following Articles – “ARTICLE 16A DOUBLE TAXATION ARRANGEMENTS (1) If the States by Act declare that arrangements specified in the Act have been made with the Government of any territory outside the Channel Islands, with a view to affording relief from double taxation in relation to income tax and any tax of a similar character imposed by the laws of that territory, and that it is expedient that those arrangements should have effect, the arrangements shall have effect in relation to income tax notwithstanding anything in any enactment. (2) Any Act made under this Article may be revoked by a subsequent Act. (3) Where any arrangements have effect by virtue of this Article, the obligation as to secrecy imposed by Article 63 of this Law shall not prevent the disclosure to any authorized officer of the Government with which the arrangements are made of such information as is required to be disclosed under the arrangements. (4) The Finance Committee may make orders for carrying out the provisions of any arrangements having effect under this Article, and paragraphs (2) and (3) of Article 68 of this Law shall apply in relation to every order so made. ARTICLE 16B TAX CREDITS (1) The provisions of this Article shall have effect where, under arrangements having effect under Article 16A of this Law, tax payable in respect of any income in the territory with the Government of which the arrangements are made is to be allowed as a credit against tax payable in respect of that income in the Island of Jersey ; and in this Article the expression ‘foreign tax’ means any tax payable in that territory which under the arrangements is to be allowed and the expression ‘income tax’ means tax chargeable under this Law. (2) The amount of the income tax chargeable in respect of the income shall be reduced by the amount of the credit : Provided that credit shall not be allowed against income tax for any year of assessment unless the person entitled to the income is resident in the Island of Jersey for that year. (3) The credit shall not exceed the amount which would be produced by computing the amount of the income in accordance with the provisions of this Law and then charging it to income tax at a rate ascertained by dividing the income tax chargeable (before allowance of credit under any arrangements having effect under Article 16A of this Law) on the total income of the person entitled to the income by the amount of his total income : Provided that, in relation to a pension to which Rule 3 of the Rules applicable to Case III of Schedule D applies, the amount of the credit shall not exceed the amount of the tax chargeable in respect of that pension in accordance with that Rule. (4) Without prejudice to the provisions of paragraph (3) of this Article, the total credit for foreign tax to be allowed to a person for any year of assessment under all arrangements having effect under Article 16A of this Law shall not exceed the total income tax payable by him for the year of assessment, less any tax payable by him under the provisions of Article 11 of this Law. (5) In computing the amount of the income – ( a ) no deduction shall be allowed in respect of foreign tax (whether in respect of the same or any other income) ; ( b ) where the income tax chargeable depends on the amount received in the Island of Jersey, the said amount shall be increased by the appropriate amount of the foreign tax in respect of the income ; ( c ) where the income includes a dividend and under the arrangements foreign tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be given against income tax in respect of the dividend, the amount of the income shall be increased by the amount of the foreign tax not so chargeable which falls to be taken into account in computing the amount of the credit ; but notwithstanding anything in the preceding provisions of this paragraph a deduction shall be allowed of any amount by which the foreign tax in respect of the income exceeds the credit therefor. (6) Sub-paragraphs ( a ) and ( b ) of paragraph (5) of this Article (but not the remainder thereof) shall apply to the computation of total income for the purposes of determining the rate mentioned in paragraph (3) of this Article and shall apply thereto in relation to all income in the case of which credit falls to be given for foreign tax under arrangements for the time being in force under Article 16A of this Law. (7) Where – ( a ) the arrangements provide, in relation to dividends of some classes, but not in relation to dividends of other classes, that foreign tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any, and if so what, credit is to be given against income tax in respect of the dividends ; and ( b ) a dividend is paid which is not of a class in relation to which the arrangements so provide ; then, if the dividend is paid to a company which controls, directly or indirectly, not less than one half of the voting power in the company paying the dividend, credit shall be allowed as if the dividend were a dividend of a class in relation to which the arrangements so provide. (8) Credit shall not be allowed under the arrangements against income tax chargeable in respect of the income of any person for any year of assessment if he elects that credit shall not be allowed in the case of his income for that year. (9) Any claim for an allowance by way of credit shall be made not later than five years after the end of the year of assessment, and in the event of any dispute as to the amount allowable the claim shall be subject to objection and appeal in like manner as an assessment. (10) Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the Island of Jersey or elsewhere, nothing in this Law limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than five years from the time when all such assessments, adjustments and other determinations have been made, whether in the Island of Jersey or elsewhere, as are material in determining whether any, and if so what, credit falls to be given. ARTICLE 16C DEDUCTION OF TAX FROM DIVIDENDS (1) This Article applies to any dividend from which deduction of tax is authorized by Rule 12 of the General Rules applicable to Schedules A, B, C and D, and in this Article the expression ‘the company’ means a body of persons paying the dividend to which this Article applies. (2) The amount of tax which is authorized by Rule 12 of the General Rules applicable to Schedules A, B, C and D to be deducted by a company from any dividend to which this Article applies shall be determined without taking into account any reduction, by reason of double taxation relief, of the Jersey income tax payable directly or by deduction by the company, but – ( a ) notwithstanding anything in this Law, no relief or repayment in respect of the tax deducted or authorized to be deducted from any such dividend shall be allowed at a rate exceeding the rate (hereinafter referred to as ‘the net Jersey rate’) of the Jersey income tax payable directly or by deduction by the company after taking double taxation relief into account ; and ( b ) where the Jersey income tax payable directly or by deduction by the company is affected by double taxation relief, the particulars to be given by the company in the statement required by Rule 12A of the General Rules applicable to Schedules A, B, C and D shall (in addition to the particulars required to be given apart from this Article) include particulars of the net Jersey rate. (3) Where the whole or any part of any annual payment is payable out of a dividend to which this Article applies and the rate of relief or repayment allowable in respect of the tax deducted or authorized to be deducted from the dividend is affected by double taxation relief, the annual payment, or that part thereof, as the case may be, shall be deemed to be paid out of profits or gains not brought into charge to tax and Rule 13 of the General Rules applicable to Schedules A, B, C and D shall apply accordingly, but the tax chargeable under the said Rule on the person making the payment shall be reduced by an amount equal to tax on the payment or part of the payment at the net Jersey rate applicable to the dividend.” ARTICLE 2 For Article 68 of the principal Law 2 there shall be substituted the following Article – “ARTICLE 68 POWER TO MAKE ORDERS (1) The Finance Committee may make orders for the proper administration of this Law and generally for the purpose of carrying this Law into effect. (2) Every order made under this Article – ( a ) shall come into force on the date prescribed thereby ; ( b ) may be amended or revoked by a subsequent order ; ( c ) shall remain in force until revoked ; and ( d ) shall be laid before the States as soon as may be after it is made, and if the States, within the period of twenty-one days beginning with the day on which such order is laid before them, resolve that it be annulled, it shall cease to have effect, but without prejudice to anything previously done thereunder or to the making of any new order. (3) The Greffier of the States shall cause every order made under this Article to be printed and shall cause to be published in two newspapers circulating in the Island, one being a publication in French and the other a publication in English, a notice stating that the order has been made, the date of the coming into force thereof and the place at which printed copies thereof may be purchased. ARTICLE 3 Immediately after Rule 12 of the General Rules applicable to Schedules A, B, C and D of the principal Law, 3 there shall be inserted the following Rule – “ 12A. -(1) Every warrant or cheque or other order drawn or made, or purporting to be drawn or made, in payment of any dividend or interest distributed by any company, being a limited liability company constituted under the ‘ Loi (1861) sur les Sociétés à responsabilité limitée’, 4 or a company created by or in pursuance of a Law passed by the States and confirmed by Order of His Majesty in Council, shall have annexed thereto or be accompanied by a statement in writing showing – ( a ) the gross amount which, after deduction of the income tax appropriate thereto, corresponds to the net amount actually paid ; and ( b ) the rate and the amount of the income tax appropriate to such gross amount ; and ( c ) the net amount actually paid. (2) If a company fails to comply with the provisions of this Rule, the company shall, in respect of each offence, be liable to a fine not exceeding ten pounds : Provided that the aggregate amount of any fines imposed under this Rule on any company in respect of offences connected with any one distribution of dividends or interest shall not exceed one hundred pounds.” ARTICLE 4 This Law may be cited as the Income Tax (Amendment No. II) (Jersey) Law, 1952, and this Law and the principal Law may be cited together as the Income Tax (Jersey) Laws, 1937 to 1952. To be printed, published and posted. F. DE L. BOIS, Greffier of the States 1 Tome 1937–1938, page 147. 2 Tome 1937–1938, page 179. 3 Tome 1937–1938, page 219. 4 Tome II, page 114.