1. Exchange of information for tax purposes ‘How to create an EOI unit’ Regional Seminar Multinational Taxation & Transfer Pricing June 10-12, 2014 Hilton Trinidad & Conference Centre, Port of Spain, Trinidad Presented by: Dave Jeffery Tax Administration Jamaica Presented by: Dave Jeffery Tax Administration Jamaica

2. BACKGROUND Jamaica signed its first DTC in 1973 Jamaica currently has EOI relationship with 26 jurisdictions through DTCs/TIEAs/ CARICOM Tax Treaty Continuously working to increase its EOI network and open to new agreements with GF members

3. Exchange of Information InformationAgreements currently in force Country/Group Type of Agreement United Kingdom DTA GermanyDTA CanadaDTA United States DTA IsraelDTA SwedenDTA DenmarkDTA NorwayDTA CARICOMMultilateral FranceDTA ChinaDTA SpainDTA

4. Exchange of Information InformationAgreements currently in force Country/Group Type of Agreement Faroe Islands TIEA FinlandTIEA GreenlandTIEA IcelandTIEA Macau (SAR China) TIEA DenmarkTIEA United States TIEA

5. BACKGROUND (cont’d) Our EOI Unit was officially launched March 2012, with the assistance of international organizations and tax administration Jamaica. Currently the Unit operates out of the LTO and comprises the following:- –General Manager (Large Individuals & EOI) –Exchange of Information Officers (2) –Administrative Assistant

6. HOW TO CREATE YOUR EOI UNIT AND THE JAMAICAN EXPERIANCE

7. Factors to consider in setting up your EOI unit 1.Understand the nature and size of the work load 2.Process involves in receiving information 3.Setting quality standards 4.Performance measures and review 5.Legal framework for operation

8. Factors to consider in setting up your EOI unit (cont’d) 6.Setting administrative and procedural rules 7.Put in place an organizational structure 8.Acquire skilled and experienced staff 9.Procure the necessary material and technological support

9. Nature and size of the work load Start by looking at the different varieties of information request that you get: Simple or complex request Transfer pricing cases Do you need 3 rd party verification (e.g. Banking information) Does the request requires an audit on the taxpayer?

10. Nature and size of the work load (cont’d) For example,two (2) years ago Jamaica received a request from a treaty partner that required us doing a audit to get all the information that was requested. The audit took 8 months. Taxpayer (Individual) Taxpayer (Company) Aggregate Tax Years Assessed Tax Assessed (Individual) Tax Assessed (Company) 1513268m31m

11. Process involves in and receiving information What reception is in place when a request comes in until a final feed back is given. 1.Registering the request 2.Obtain information from internal sources 3.Obtain information from the taxpayer or from third parties 4.Give periodic updates to requesting authority on the progress of the request. 5.Packaging and sending your response 6.Ask for feed back (performance measuring tool)

12. Set Quality Standards Ensure that there is completeness of the requests issued and received Provide clear and easily understood requests and responses Timeliness observed Feedback provided and used

13. Develop performance measures and a review system A basic record keeping and reporting system is a good start Ensure that all information about a request is logged. This should include information such as: 1. date of receipt 2. date of Acknowledgement 3. date the information is provided and 4. date the case is closed From this a monthly report should be generated of all activities

14. Develop performance measures and a review system (cont’d) Set targeted timelines for certain activities Acknowledge receipt of all information requested on a timely basics. In Jamaica we acknowledge receipt within 3 days if electronic and 7 days if written. Where a request is incomplete or invalid notify the requesting party. In Jamaica we do this within 6 weeks. Where it is clear that the deadline of 90 days for supplying the requested information wont be met. Inform the party before the time pass.

15. Legal framework for operation General Regulations Article 26 of the OECD Model Taxation Convention Specific Regulations 1. Revenue Administration Act and Tax Statutes 2. Bilateral DTA 3. Multilateral DTA 4. TIEA’s

16. Legal framework for operation (cont’d) Rules governing the power to exchange information and the legal basis on which information can be exchange. Rules governing the scope of limitations and confidentiality rules Rules governing EOI 1.EOI requirement 2.Competent Authority 3.Who may use the information 4.Purposes for which the information is exchange

17. Administrative and procedural rules Administrative rules Competent Authority function and the delegation of this responsibly EOI management control (for example signing powers and responsibility) Management of the forms of EOI –Information on request –Spontaneous exchange –Automatic exchange –Simultaneous exchange

18. Administrative and procedural rules (cont’d) Procedural rules Function and power of each EOI officer Language use for corresponding How is cost incurred in providing the information be dealt with? What forms to be use and the standard formats for exchanging information? How should internal deadlines be dealt with?

19. Organizational Structure Type of EOI structure used depends very often on the structure of your Tax Administration. Your Tax Administration may use a 1.Centralized model – Where all EOI functions are perform and control by the competent authority himself. 2.Decentralized model – Where the functions are delegated to units and sub-units within the Tax administration to be perform.

20. Organizational Structure In Jamaica the Large Taxpayer Office (LTO) was established with the Exchange of Information Unit being a sub-unit under that structure. Critical to the streamlining of the exchange of information process was the necessary organizational changes to include dedicated staff for the carrying out of EOI functions This is depicted by the following organizational charts which gives an overview of The LTO and the EOI unit

21. Large Taxpayer Office Organizational Structure

22. EOI Unit and its linkages within TAJ

23. Acquire skilled and experienced staff Four major areas to look at in staffing your EOI unit are: 1.Experience and knowledge acquired 2.Personality profile of prospective staff 3.Whether training is required and the persons ability to be trained 4.Qualification requirements

24. Material resources and technological support Two (2) questions you want to ask 1. Do you have your own budget? If not 2. How would resources be made available to you? These questions are important as you would need resources to: -Set up this specialize unit -Procure technology that can enable you to exchange information in a secured way -Support operational cost -Training cost, etc.

25. Message to my colleagues Start where you are Be positive Improve as required Use EOI to your benefit

26. Jamaica and FATCA readiness A Working Group was set up consisting of members from BOJ, MoF&P, FSC, AGD and Tax Administration GOJ has signed the IGA with US Government on May 1, 2014 Cabinet has issued drafting instructions for Domestic legislation to support sharing of data with IRS

27. Jamaica and FATCA readiness Tax Administration has assign the administration of FATCA to the Exchange of Information Office Working Group met with FATCA experts from the major International Auditing firms, this was with a view of providing technological and consultancy services.

28. Jamaica and FATCA readiness TAJ dialogued with the IRS on the technical requirements needed to implement FATCA. The IRS provided the following documents. 1. FATCA XML Schema 2. XML Schema User Guide and 3.Slides on Data Exchange System Requirements

29. Jamaica and FATCA readiness TAJ prepared business requirements and started a search for an application. All the available commercial off-shelf solutions examined, their costs were prohibitive. TAJ approached the Developers of new tax system (GenTax) – Fast Enterprises and asked them to provide the solution as part of the system. Negotiation has been concluded and development/configuration of the solution is scheduled to begin June 9.

30. Jamaica and FATCA readiness The processes to be implemented with this solution are: (1)Create an Internet Portal for FIs to be registered and issued credentials; (2)Users will log on with their credentials and upload XML formatted files

31. Jamaica and FATCA readiness 3.Data will be encrypted using Advanced Encryption Standard (AES) both in transmission and at store; 4.Data will be examined by TAJ for completeness before uploading to the IRS 5.Notifications will be sent to FIs when data is uploaded and after data is examined by TAJ.

32. Jamaica and FATCA readiness Next Steps Acquire and implement Technical Infrastructure and Software Initiate technical dialogue with the FIs on the preparation of the data Train TAJ staff to conduct compliance of FIs Training FIs staff in the use of facility Pilot testing and Roll out

34. THANK YOU