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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE

OF INFORMATION FOR TAX PURPOSES

Peer Review Report


Phase 1
Legal and Regulatory Framework

JAMAICA
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Jamaica 2010
PHASE 1

September 2010
(reflecting the legal and regulatory framework
as at May 2010)
This work is published on the responsibility of the Secretary-General of the OECD.
The opinions expressed and arguments employed herein do not necessarily reflect
the official views of the OECD or of the governments of its member countries or
those of the Global Forum on Transparency and Exchange of Information for Tax
Purposes.

Please cite this publication as:


OECD (2010), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
Reviews: Jamaica 2010: Phase 1, OECD Publishing.
http://dx.doi.org/10.1787/9789264095564-en

ISBN 978-92-64-09555-7 (print)


ISBN 978-92-64-09556-4 (PDF)

Series: Global Forum on Transparency and Exchange of Information for Tax Purposes: Peer Reviews
ISSN 2219-4681 (print)
ISSN 2219-469X (online)

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TABLE OF CONTENTS – 3

Table of Contents

About the Global Forum .................................................................................................... 5

Executive Summary ............................................................................................................ 7

Introduction....................................................................................................................... 11
Information and methodology used for the peer review of Jamaica ............................... 11
Overview of Jamaica ....................................................................................................... 12
General information on legal system and the taxation system ........................................ 12
Overview of commercial laws and other relevant factors for exchange of
information ...................................................................................................................... 16
Recent developments ...................................................................................................... 17
Compliance with the Standards ....................................................................................... 19

A. Availability of Information ................................................................................... 19


Overview ......................................................................................................................... 19
A.1. Ownership and identity information .................................................................... 20
A.2. Accounting records .............................................................................................. 38
A.3. Banking information ............................................................................................ 43
B. Access to Information ............................................................................................ 47
Overview ......................................................................................................................... 47
B.1. Competent Authority’s ability to obtain and provide information ....................... 48
B.2. Notification requirements and rights and safeguards ........................................... 61
C. Exchanging Information ....................................................................................... 65
Overview ......................................................................................................................... 65
C.1. Exchange-of-information mechanisms ................................................................ 65
C.2. Exchange-of-information mechanisms with all relevant partners........................ 71
C.3. Confidentiality ..................................................................................................... 72
C.4. Rights and safeguards of taxpayers and third parties ........................................... 74
C.5. Timeliness of responses to requests for information............................................ 74
Summary of Determinations and Factors Underlying Recommendations .................. 77

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s Response to the Review Report ............................................... 83

Annex 2: List of all Exchange-of-Information Mechanisms in Force .......................... 85

Annex 3: List of all Laws, Regulations and Other Material Received ......................... 87

Annex 4: Overview of Commercial Laws and Other Relevant Factors for


Exchange of Information .................................................................................................. 89

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
ABOUT THE GLOBAL FORUM – 5

About the Global Forum

The Global Forum on Transparency and Exchange of Information


for Tax Purposes is the multilateral framework within which work in the
area of tax transparency and exchange of information is carried out by
over 90 jurisdictions which participate in the work of the Global Forum
on an equal footing.
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the standards of transparency and
exchange of information for tax purposes. These standards are primarily
reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its
commentary as updated in 2004, which has been incorporated in the UN
Model Tax Convention.
The standards provide for international exchange on request of
foreseeably relevant information for the administration or enforcement
of the domestic tax laws of a requesting party. Fishing expeditions are
not authorised but all foreseeably relevant information must be provided,
including bank information and information held by fiduciaries,
regardless of the existence of a domestic tax interest or the application of
a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified
by the Global Forum as relevant to its work, are being reviewed. This
process is undertaken in two phases. Phase 1 reviews assess the quality
of a jurisdiction’s legal and regulatory framework for the exchange of
information, while Phase 2 reviews look at the practical implementation
of that framework. Some Global Forum members are undergoing
combined – Phase 1 plus Phase 2 – reviews. The ultimate goal is to help
jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports.
For more information on the work of the Global Forum on
Transparency and Exchange of Information for Tax Purposes, and for
copies of the published review reports, please refer to
www.oecd.org/tax/transparency.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
EXECUTIVE SUMMARY – 7

Executive Summary

1. This report describes and analyses the legal and regulatory


framework for transparency and exchange of information for tax
purposes in Jamaica.
2. Jamaica was a British colony and became independent nation
in 1962. Its legal system is based on English Common Law. Many of its
laws were made during the British rule and continue to be in operation
without significant changes. In October 2008, Jamaica announced it
will develop an International Financial Services Centre. As a result,
Jamaica was invited to become a Global Forum member. Jamaica
joined the Global Forum in July 2010 and has actively co-operated in
this review.
3. As regards the availability of information on the legal
ownership of companies, Jamaica has laws that ensure that such
information is to be held with the company and provided to the
government authorities such as the Registrar of Companies. Further, the
anti-money laundering legislation requires that information on the
owners of companies be provided to banks or financial institutions, if
these are their customers. However, a deficiency has been noted in the
availability of information on the owners of “share warrants to bearer”,
which grant a right to shares, without the need to record who holds the
share warrant to bearer. This issue is of less importance since the
system of issue of share warrants is in abeyance.. It may further be said
that the provisions under the relevant laws provide for investigative
powers to the company itself and to the government authorities to
inquire into the ownership of a company where the legal owners hold
the interest on behalf of other persons (i.e. nominee arrangement).
There is no provision requiring disclosure of ownership information by
companies incorporated outside Jamaica but being tax resident in
Jamaica due to presence of central management and control in Jamaica.
4. Jamaica does not have a specific law in place to impose any
obligations on the partnerships and trusts to keep and retain ownership
and identity information. However, ownership and identity information
is required to be submitted to the registration and tax authorities.
5. Jamaican law ensures the maintenance of accounting records
by companies. Partnerships, trusts and other taxable entities are

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
8 – EXECUTIVE SUMMARY
compulsorily required to maintain accounting records for tax purposes.
Although administrative laws require government authorities to hold
the records submitted to them and the statute of limitations means all
records are kept for more than 5 years, there is not a specific
requirement in the law for non-regulated entities to maintain that
information for a five year period. This does not include financial
institutions and other businesses and professions covered by the anti-
money laundering laws and those laws require a compulsory five year
retention period for records relating to customer due diligence and
financial transactions.
6. Jamaica has two sources of law allowing its revenue authority
to access information. One suffers from the fact that it cannot be used
to obtain information from financial institutions and similar entities,
and the other law which is used for requests to financial institutions is
restricted by the requirement that the person in question be under
examination by the Jamaican tax authorities. Latter tantamount to a
domestic tax interest, which is an obstacle to the effective exchange of
information. The report recommends that Jamaica issue and adopt
regulations whereby the ability to apply administrative procedures to
obtain the information does not require the taxpayer to be under
examination or persons to be taxpayers in Jamaica.
7. Sanctioning powers are in place to secure the compliance of
the provisions. The effectiveness of penalties will be examined in the
course of the Phase 2 review.
8. Jamaica has tax treaties with most of its large economic
partners. The treaty with Switzerland does not have an EOI Article.
Only one of its bilateral treaties and its only TIEA provide for exchange
of information in accordance with the standard. Jamaica is also a
signatory to the multilateral CARICOM1 Income Tax Treaty which
includes 10 other countries2 and, because of restrictions in Jamaica’s
and some of its partners’ domestic systems with respect to availability
and access to information, this too does not meet the international
standard. It is recommended that Jamaica pursue its policy to conclude
agreements to the standard.
9. Jamaica has a system which provides for international
exchange of information for tax purposes but this system does not have

1
Caribbean Community.
2
Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts
and Nevis, Saint Lucia, St. Vincent and the Grenadines, and Trinidad and
Tobago.

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EXECUTIVE SUMMARY – 9

all the elements which ensure effective exchange of information. These


issues warrant close attention by the Global Forum in the context of
Jamaica’s Phase 2 review of its exchange of information practices and
it is important that Jamaica progress its planned reform of legislation
governing collection, disclosure and exchange of information for tax
purposes.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
INTRODUCTION – 11

Introduction

Information and methodology used for the peer review of Jamaica

10. This assessment of the legal and regulatory framework of


Jamaica was carried out in accordance with the international standards
for transparency and exchange of information as described in the
Global Forum’s Terms of Reference,3 and was prepared using the
Global Forum’s Methodology for Peer reviews and Non-Member
Reviews.4 The assessment was based on the laws, regulations, and
exchange-of-information mechanisms in force or effect as at May 2010,
other materials supplied by Jamaica, and information supplied by
partner jurisdictions.
11. The Terms of Reference break down the standards of
transparency and exchange of information into 10 essential elements
and 31 enumerated aspects under three broad categories:
(A) availability of information; (B) access to information; and (C)
exchanging information. This review assesses Jamaica’s legal and
regulatory framework against these elements and each of the
enumerated aspects. In respect of each essential element a
determination is made that either (i) the element is in place, (ii) the
element is in place but certain aspects of the legal implementation of
the element need improvement, or (iii) the element is not in place.
These determinations are accompanied by recommendations for
improvement where relevant.
12. The assessment was conducted by a team consisted of two
assessors and a representative of the Global Forum Secretariat: Ms.
Maria Dolores Gil Esnal from the Federal Administration of Public
Revenue, Argentina; Alexandra Storckmeijer from the Federal Tax
Administration, Switzerland; and Mr. Sanjeev Sharma from the Global
Forum Secretariat. The assessment team assessed the legal and
regulatory framework for transparency and exchange of information
and relevant exchange-of-information mechanisms in Jamaica.
3
See Terms of Reference to Monitor and Review Progress Towards Transparency
and Exchange of Information for Tax Purposes (full text available at
http://www.oecd.org/dataoecd/37/42/44824681.pdf).
4
See Methodology for Peer reviews and Non-Member Reviews (full text available
at http://www.oecd.org/dataoecd/37/41/44824721.pdf ).

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
12 – INTRODUCTION
Overview of Jamaica

13. The country of Jamaica consists of the single island situated


towards the western end of the Caribbean Sea and the Pedro and
Morant Cays (islets). The nearest neighbours are Cuba 145 km to the
north and Haiti, part of the island of Hispaniola, 100 km to the east.
Jamaica has a geographical area of 10 991 square kilometres (4 223
square miles) and a total coastline of 1 022 kilometres (634 miles). The
official language of Jamaica is English and it had a population of
2 698 8005 as at 31 December 2009. Jamaica is a member of the
Commonwealth of Nations and it became an independent nation in
1962. It is divided into three counties and 14 parishes. Local
governments are funded by local taxes and do not have regulation-
making powers on issues beyond the scope of local administration. The
capital city is Kingston (- 5 GMT).
14. The Jamaican economy is heavily dependent on services,
mainly consisting of tourism and financial services, which account for
more than 60% of GDP. The tourism industry earns over 50% of the
country's total foreign exchange earnings. The balance of its foreign
exchange is mainly earned from export of Bauxite/Alumina, garments
and agriculture products. Its major export trading partners are the
United States of America (USA), Canada, United Kingdom (UK),
Netherlands, France etc., whereas its imports are mainly from USA,
Trinidad and Tobago, Germany and Venezuela. Jamaica’s per capita
Gross National income was USD 4 870 in 2008 (World Bank).The
currency of Jamaica is the Jamaican Dollar. (USD 1 was equal to
approximately JMD 86 as at 30 June 2010). Jamaica is member of the
CARICOM6 single market and economy.

General information on legal system and the taxation system

Legal system
15. The Head of State is the British Monarch represented by the
Governor General in Jamaica. Jamaica is a parliamentary democracy,
modelled on the Westminster system. The Parliament comprises the
monarch, the Senate and the House of Representatives. The Senate
comprises 21 members appointed by the Governor General; 13
appointed in accordance with the advice of the Prime Minister and 8 in
5
http://statinja.gov.jm/population.aspx, accessed 13 May 2010.
6
http://www.mfaft.gov.jm/?q=caribbean-community-caricom.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
INTRODUCTION – 13

accordance with the advice of the Leader of the Opposition. The House
of Representatives consists of 60 members elected under universal adult
suffrage. The executive power of the government resides in the council
of ministers (cabinet), which is led by the Prime Minister. The Prime
Minister is the leader of the majority party or the leader of the majority
coalition in the House of Representatives. Constitutionally, elections
must be held every five years, but they may be called at any time by the
Prime Minister.
16. The legal system of Jamaica is based on English common
law. Justice is administered by the court system7 consisting of the Court
of Appeal, Supreme Court, Resident Magistrate’s Court and Court of
Petty Sessions. The Supreme Court has original jurisdiction and decides
applications for redress of breaches of fundamental rights and freedom
provisions of the Constitution. Within the Supreme Court, there are
specialised courts such as the Revenue Court, established in 1971, and
the Commercial Court, which began operations in February 2001. The
hierarchy of laws in Jamaica is constituted by: (i) the Constitution of
Jamaica; (ii) statutes and treaties; and (iii) common law and customs.
17. Taxpayers aggrieved by decisions of the tax administration
can seek judicial review through civil proceedings in the Supreme
Court. Either party can contest a decision of the Supreme Court in the
Court of Appeal and the matter could finally go to the Judicial
Committee of the Privy Council.
18. For transposing the tax treaties into domestic law, the
Minister of Finance and Public Service makes a Cabinet Submission for
Cabinet Approval. The approval is the ratification process. Thereafter,
the treaty is incorporated into Jamaican laws where the Minister of
Finance makes an Order pursuant to s.83 of the Income Tax Act 1955
(ITA). The Order (which includes the actual treaty) is published by way
of a Notice in the Gazette which introduces the treaty into Jamaican
Law.

Taxation System
19. All taxes on income are levied by the central government.
Certain taxes on real property and licence fees are levied by local
government. Jamaica levies tax on income of every person and the basis
of imposition of income tax is provided in s.5 of the ITA. The ‘person’
means any individual and also any body of persons, which include
corporate. The “body corporate subject to income tax” means any body
7
http://www.moj.gov.jm/courts.

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14 – INTRODUCTION
corporate, wherever resident, other than one whose entire income is by
s.12 of the ITA or any other enactment exempted or relieved from
income tax.
20. Every person liable to pay income tax is required to deliver a
true and correct return of his whole income in the prescribed form (ITA,
s.67). Persons committing defaults in filing returns of income or
making false claims are subject to penalties (including fines) and are
liable to prosecution under the ITA. In Jamaica the tax year coincides
with the calendar year, however the accounting year (i.e. fiscal year)
starts on 1 April and ends on 31 March.
21. Income tax is charged on the worldwide income of resident
individuals in Jamaica and the income of non-residents derived from
Jamaica. There is no income tax on capital gains earned on the disposal
of capital assets. However, there is a transfer tax of 4% of gross
consideration or market value when title passes. Resident individuals
which are considered non- “domiciled” in Jamaica, as approved by the
Commissioner, or are Commonwealth citizens who are resident but not
ordinarily resident in Jamaica are in principle taxable on foreign income
only on a remittance basis (to the extent that such income is received in
Jamaica (s.27 ITA)). The test of residency in Jamaica is determined by
whether the resident is ordinarily resident or domiciled in Jamaica. An
individual is considered resident in Jamaica, if the stay in the island is
more than183 days. The rate of tax for individual is fixed at 25%,
however due to revenue enhancing measures, a progressive rate
structure (starting at 25% and going up to a maximum of 35%) has been
prescribed, which is scheduled to come to an end in December 2010.
22. Jamaican resident companies are liable to income tax on all
sources of non-exempt income wherever arising. A company is
regarded as resident in Jamaica if its central management and control is
located and exercised in Jamaica. A non-resident company is taxed on
income of a branch carrying on a trade or business in Jamaica, i.e. the
income arising in Jamaica. The rate of tax on companies is 33.3%.
23. Partnerships and joint ventures are not regarded as separate
persons for income tax purposes and are fiscally transparent entities.
Their members or participants are chargeable in their own right and in
accordance with their residence status on their share of profits as if they
had derived the profits directly. These entities are required to file tax
returns.
24. Trusts and estates are regarded as separate entities for tax
purposes and any income accruing to the trust or estate is taxable. The
trustees or personal representatives of the deceased are responsible for

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
INTRODUCTION – 15

compliance. The profits and gains arising or accruing to a trustee from a


trust estate or to a personal representative from the estate of a deceased
person are subject to tax at the rate of 25%. Tax must be deducted at the
rate of 25% from payments to beneficiaries out of the trust's estate,
unless the Commissioner authorises the trustee(s) to make the payments
gross after being satisfied that the beneficiary is not liable to file return
under the provisions of the ITA (ITA, s.6(6)).
25. Every person liable to pay income tax in respect of any year
of assessment is required to deliver a true and correct return of his/her
income from every source. (ITA, s.67). The term “liable to tax” is not
defined in the ITA. The Government of Jamaica allots a unique nine-
digit identification number known as a taxpayer registration number
(TRN) to each individual taxpayer, business enterprise, organisation
(non-profit, partnership, charity, etc.) by way of an automated system.
For obtaining TRN, the taxpayers are required to submit various
documents along with the application form. These documents contain
useful information about the entity. TRN must be used when
conducting business transactions with tax departments or government
agencies. Penalties have been prescribed for non-registration.
26. Jamaica has indicated that the number of companies,
partnerships, trusts and other entities registered for Taxpayer
Registration Numbers (TRNs), available on TRN system on 19 May
2010 were:
Organisation type Number of TRNs
Companies 38 460
Partnerships 7 877
Non Profit Organisations 1 544
Trust 989
Government 2 093
Statutory Bodies 36
Other 2 359

27. Jamaica allows various tax incentives to qualifying foreign


and local investors to facilitate industrial development, exploit and
develop local resources, improve competitiveness of Jamaican
international trade, promote economic growth and provide employment
and economic development.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
16 – INTRODUCTION
28. The Jamaican Export Free Zones (EFZ) is a government
initiative to encourage foreign investment. Businesses operating within
these zones have no tax on their profits, duty exemption on imports and
exports, and relaxed customs procedures. However, they must export
85% of their produce outside of CARICOM. Created under the Jamaica
Export Free Zones Act (EFZ) 1982, the zones are operated by the
government. Benefits under the EFZ are granted only to companies
incorporated or registered in Jamaica under the Companies Act. In
addition, all transactions must be conducted in US currency. Jamaica
has five free trade zones but companies outside of the zones can apply
for Free Zone status as Single Entity Free Zones. The first free zone,
Kingston Free Zone (KFZ), was created in 1976. The other major free
zones are Montego Bay Free Zone (MBFZ), Garmex Free Zone, Hayes
Free Zone, and Cazoumar Free Zone.
29. The International Finance Companies (Income Tax Relief)
Act 1971 as amended provides the establishment of international
finance companies whose income from prescribed financial operations
is subject to reduced income taxation at the rate of 2.5%. A company
incorporated in Jamaica or outside Jamaica qualifies to be an
international finance company (IFC), if at least 95% of the issued share
capital and voting power is held by non-residents. The dividends paid
by an IFC to a non-resident are subject to withholding tax at a reduced
rate of 2.5%. Payments to a non-resident of loan interest and royalties
related to the prescribed financial operations may be made without the
withholding of tax. Jamaica has stated that this law has been kept in
abeyance and no approvals are being given to companies. Jamaica has
recently deleted all information about IFCs from its websites.

Overview of commercial laws and other relevant factors for


exchange of information

30. The Minister of Finance is empowered to enter into


arrangements with foreign territories under the provisions of the Income
Tax Act for the purpose of relief from double taxation of income.
Jamaica entered into its first Income Tax Treaty with United Kingdom
in 1973. At present, Jamaica has bilateral tax treaties with 12 countries8
and is also a party to the CARICOM income tax treaty, which is signed
by 11 of the 15 CARICOM members.9 Jamaica has also signed one

8
Only 11 of these treaties have EOI provisions.
9
The 15 members of CARICOM are: Antigua and Barbuda, Bahamas, Barbados,
Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Suriname, Saint

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
INTRODUCTION – 17

Tax Information Exchange Agreement with the USA. In addition, it has


signed an income tax treaty with the Netherlands Antilles in 2009
which has EOI article providing exchange of information to the
international standards. However this treaty is yet to come into force.
31. Section 9(d) of the Revenue Administration Act refers to
safeguarding the interest of Jamaica in the negotiation of international
taxation agreements. The Minister of Finance is the competent authority
for the DTC/TIEA purpose in Jamaica. The role of the competent
authority has been delegated by the Minister to the Director General of
Tax Administration.
32. Jamaica has enacted the Mutual Assistance (Criminal
Matters) Act 1995 (MACMA). This is the primary domestic legislation
that guides Jamaica’s mutual legal assistance to foreign countries. The
MACMA allows Jamaica to facilitate overseas law enforcement
agencies by assisting in investigations and proceedings in relation to
criminal matters. Such assistance is available only to the criminal law
enforcement authorities of the requesting country. Under the act the
country requesting assistance from Jamaica should either be (a) a
designated Commonwealth country or (b) a treaty country.

Recent developments

33. The Government of Jamaica issued a press release on 1


October 2008 regarding establishment of a Jamaican International
Financial Service Centre (IFSC). The IFSC is not yet established.
However, the Global Forum on Transparency and Exchange of
Information for Tax Purposes is monitoring this development;
particularly the compliance with regard to the standards of transparency
and exchange of information.
34. The Jamaican Tax Administration is now undergoing a
reform process slated to end in 2013. Under this programme, the reform
of tax legislation governing the collection, disclosure and exchange of
tax information is an approved priority for the financial year 2010 -
2011.

Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, and Trinidad and
Tobago.

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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 19

Compliance with the Standards

A. Availability of Information

Overview

35. Effective exchange of information requires the availability of


reliable information. In particular, it requires information on the
identity of owners and other stakeholders as well as information on the
transactions carried out by entities and other organisational structures.
Such information may be kept for tax, regulatory, commercial or other
reasons. If such information is not kept or the information is not
maintained for a reasonable period of time, a jurisdiction’s competent
authority may not be able to obtain and provide it when requested. This
section of the report assesses the adequacy of Jamaica’s legal and
regulatory framework on availability of information.
36. In respect of identity and ownership information of
companies, several commercial and regulatory laws require the
availability of such information. The information is to be held and
maintained with the companies themselves and with the Registrar of
Companies. However, the Companies Act provides for the issue of
‘share warrants to bearer’ which have some of the characteristics of
bearer shares. These share warrants to bearer can be transferred any
number of times without such transfers being recorded in the register of
members. The information about ownership of such share warrants is
neither required to be kept by the companies nor available with any
government authority. This is not however a significant issue in
Jamaica since the ability of companies to issue share warrants to bearer
is in abeyance.
37. Information is not statutorily required to be maintained by a
company and may also not be available with any other authority that
identifies the persons in an ownership chain where a legal owner of a

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
20 – COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
company acts on behalf of another person as a nominee or under similar
arrangements, Beneficial ownership can nevertheless be investigated by
the companies themselves, by the Minister as well as by tax authorities.
38. Companies incorporated outside Jamaica (foreign companies)
are allowed to raise share capital and issue debentures in Jamaica.
However, it is not mandatory for them to keep a branch register of their
members who are resident in Jamaica. Foreign companies incorporated
outside Jamaica but having central management and control in Jamaica
are not required to provide the ownership information in Jamaica.
39. Jamaica has enforcement provisions in its law ensuring
availability of information required to be kept under the relevant laws.
40. Jamaican law does not clearly require keeping of the
underlying documents by all relevant entities.
41. Jamaica does not have provisions in the legislation requiring
retention of the accounting records by all the persons or by the
authorities. In absence of this requirement, the availability of records
for five years cannot be guaranteed.

A.1. Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.

Companies (ToR A.1.1) 10


42. In Jamaica, the Companies Act 2004 repealed and replaced
the earlier Companies Act. Section 2 of the Companies Act 2004 defines
the term ‘company’ to mean a company formed and registered under
the Companies Act 2004 or an existing company. Companies Act 2004,
s.3 provides the mode of formation of a company. One or more persons
may form a company by signing and sending articles of incorporation
to the Registrar and complying with the requirements of the act in
respect of registration. Jamaica recognises the sole member company.
Section 4 establishes a company as a legal person.

10
Terms of Reference to Monitor and Review Progress towards Transparency and
Exchange of Information.

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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 21

Types of Companies
43. The Companies Act s.3 provides for the incorporation of the
following type of companies:
• Company limited by shares – A company having the liability of its
members limited by the articles to the amount, if any, unpaid on the
shares respectively held by them;

• Company limited by guarantee – A company having the liability of its


members limited by the articles to such amount as the members may
respectively undertake to contribute to the assets of the company in the
event of its being wound up. A company limited by guarantee might be
incorporated with or without share capital;

• Unlimited Company – A company not having any limit on the liability of


its members.

44. A company can also be classified as a private company or a


public company. Section 25 defines a private company to mean a
company which by its articles:
• restricts the right to transfer its shares and limits the number of its
members to twenty other than the employee members;

• prohibits any invitation to the public to subscribe for any shares or


debentures of the company;

• prohibits any invitation to the public to deposit money for fixed periods
or payable on call whether bearing or not bearing interest; and

• subject to the exceptions provided for, prohibits any person other than the
holder from having any interest in any of the company’s shares.

45. Section 25 (6) states that a public company is a company that


is not a private company.
46. In addition, Companies Act s.27A defines ‘Mutual Fund
Company’ and provides special rules for it. A mutual fund company is
“a company having a share capital and incorporated for the purpose of
investing the moneys of its members for their mutual benefit”. The
company states in its articles that it is a mutual fund company, having
the power to redeem or purchase for cancellation its shares without

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reducing its authorised share capital and is registered under the
Securities Act as a mutual fund.
47. An association formed as a limited company for promoting
commerce, art, science, religion, charity or any other useful object and
intends to apply its profits, if any, other income in promoting its objects
and to prohibit the payments of any dividend to its members can be
allowed by the Minister to be registered as a company with limited
liability and such company is exempted from sending the list of
members to the Registrar.
48. In the case of a company limited by a guarantee and not
having a share capital, no person other than a member can have a right
to participate in the divisible profits of the company unless such
provision was in existence from the beginning (Companies Act s.20).

Registration of companies
49. There are currently 63 272 companies registered in Jamaica.
50. Provisions relating to registration of companies are contained
in s.11 to s.18 of the Companies Act. All companies incorporated in
Jamaica (including, for example mutual fund companies) are required
to register with the Registrar of Companies. Section 11 requires that the
articles shall be delivered to the Registrar who shall retain and register
them if the articles comply with the provisions of the Act. Section 13(2)
requires the production of a statutory compliance declaration by an
attorney-at-law engaged in the formation of the company, or by a
person named in the articles as a director or secretary of the company,
or by a person who is a member of the Institute of Chartered Secretaries
and Administrators engaged in the formation of the company certifying
the compliance with the requirements under the Companies Act. The
articles must be signed by each subscriber to the articles.
51. Companies Act s.9 requires that in the case of an unlimited
company or a company limited by guarantee the articles must state the
number of members with which the company proposes to be registered
and, if the company has the share capital, the amount of share capital
with which the company proposes to be registered. There is no
provision to provide names and addresses of the members, while
registering the company. An increase in the number of members
beyond the registered number by an unlimited company or a company
limited by guarantee requires to be notified to the Registrar of
Companies and he shall record the increase.

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Ownership information on companies


52. Every company in Jamaica is required to keep a register of its
members containing information about the names and addresses and the
occupation of the members (Companies Act s.109). A company having
share capital is also under obligation to keep a statement of the shares
held by each member, distinguishing each share by its number, and the
details of payments made. The date at which each person was entered in
the register as a member and also the date at which any person ceased
to be a member. The register of members is generally kept at the
registered office of the company but in no case it can be kept at a place
outside Jamaica.
53. The company registers a transfer of shares in or debentures of
the company on the basis of receipt of a proper instrument of transfer
and an entry of name of transferee is made in the register of members
(s.75).
54. The register of members is available for members as well as
public for inspection and copying, on payment of a fee (free to
shareholders) (s.112). Similarly, a company which has issued
debentures is required to keep a register of holders of debentures having
various particulars including the name and addresses of the debenture
holders (s.84) and this register of debenture holders is also available for
public inspection (s.86).
55. Companies Act s.52 has a provision regarding submission of
returns of additional allotments of shares to the registrar indicating
among other things therein the names, addresses and description of the
allottees and the amount, if any, paid or due and payable on each share.
The copies of contracts are also required to be filed if shares are allotted
as fully or partly paid up otherwise than in cash.
56. Companies Act s.121 puts an obligation on every company to
file an annual return in the prescribed form set out in part II of fifth
schedule. This requires a list of past and present members containing
their names, addresses and occupations, number of shares held by them
and also change in their shareholding since the date of last return. The
information about the dates of registration of the transfers is also
required in the form.
57. Companies Act s.25(1)(e) further provides that any person,
other than the holder is prohibited from having any interest in any of
the company’s shares except as provided in twelfth schedule. The
twelfth schedule deals with the exception in the situations of death and
for family settlement, disability, bankruptcies etc., and accordingly in

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case of private companies the legal owners would be the beneficial
owners of shares.
58. Part X of the Companies Act contains provisions relating to
companies incorporated outside the Island and carrying on business
within the Island. This may include companies not incorporated in
Jamaica but having its central management and control in Jamaica.
These companies are required, within one month of establishment of
the place of business, to deliver to the Registrar for registration a
certified copy of the charter, statutes or articles of the company, or
other instrument constituting or defining the constitution and containing
the name of the company, names and address of the directors or
shadow directors of the company and particulars as are required in the
register of directors of the company and the name and address of the
resident person for receiving the notice (s.363).The information on the
shareholders/owners of the parent company is however not required to
be provided.
59. Companies that have accounts with or carry out transactions
through banks and financial institutions are required to provide the
identity information to their bankers as per regulation 7 of the POCA
(MLP) Regulations 2007 and s.IV of the Bank of Jamaica (BOJ)
AML/CFT Guidance Notes. This information cannot be obtained
directly from the banks or financial institutions by the competent
authority for the purposes of exchanging information with foreign tax
authorities under EOI arrangements, because s.17G of the Revenue
Administration Act 1985 requires obtaining a production order from the
court.
60. All persons doing business in Jamaica are required to obtain a
Taxpayer Registration Number (TRN) from the TRN office in Kingston
(s.17D of Revenue Administration Act 1985).
61. Overseas companies are also required to obtain TRN by filing
the completed Application for “Taxpayer Registration (Organizations)”
signed by an Authorised Officer or the local representative. Documents
are required to be filed along with the application; however, no
information about owners is required to be filed.
62. Domestic and foreign companies are taxable entities in
Jamaica and are required to file annual tax returns. A body corporate
subject to income tax is defined in the ITA to mean any body corporate,
wherever resident, other than one whose entire income is by s.12 or any
other enactment exempted or relieved from income tax. Tax returns are
not required to contain any ownership information.

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63. Jamaica’s International Finance Companies (Income Tax


Relief) Act 1971 (IFC Act) as amended provides the establishment of
international finance companies whose income from prescribed
financial operations is subject to reduced income taxation. Section 8 of
the IFC Act provides that Minister may make regulations for
prescribing the records to be kept and the returns to be furnished by
branches in Jamaica of approved companies. Section 9 of the IFC Act
provide that other than the relief from liability to income tax under the
principal act other provisions as are applicable to a company shall apply
to an approved company. Jamaican authorities have submitted that the
application of this act has been kept in abeyance and no approvals for
benefits under IFC Act are being given.
64. In addition, tax incentives under various enactments like
Export Industry Encouragement Act, Industrial Incentives Act, Motion
Picture Industry Incentives Act, Hotel Incentives Act and Cottage
Incentives Act are also being given in Jamaica. Jamaican authorities
have clarified that the requirement for keeping ownership and
accounting information with regard to companies obtaining benefits
under these enactments and IFC are same as applicable to entities not
receiving any benefits and tax audits are conducted by the Taxpayer
Audit and Assessment Department, a division of the revenue
department.

Bearer shares (ToR A.1.2)


65. Jamaica does not allow for the issuance of bearer shares.
There are, however, provisions for bearer share warrants, though this
system is now in abeyance and, from 2004 the Companies Act has not
allowed for the issuance of share warrants to bearer with respect to
limited liability companies. A person holding a bearer share warrant
which was issued before this system went into abeyance has a right to
ordinary shares in the company but cannot vote at shareholders’
meetings and only has his/her details included in the company share
register when the warrant is surrendered.
66. Section 103(1) of the Companies Act provides for registration
of charges in a company, noting, inter alia, that the company must keep
at its registered office a register of charges detailing all of the charges
affecting the property of the company, giving in each case a short
description of the property charged, the amount of the charge and,
except in the case of securities to bearer, the names of the persons
entitled thereto.

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67. For those share warrants to bearer which are still in existence,
the identity of owners of these warrants is not required to be provided
nor maintained by the company in the register of members. The
information regarding the ownership of this type of share warrant will
also not be available in the annual return. As a result, Jamaica does not
have mechanisms which allow the owners of share warrants to bearer to
be identified. As this system is now in abeyance, the assessment team is
of the opinion that this issue is of limited importance.

Nominee shareholder or similar arrangements


68. The terms of reference requires that jurisdictions should
ensure that information is available to their competent authorities that
identify the owners of companies and any bodies corporate. Owners
include legal owners, and, in any case where a legal owner acts on
behalf of another person as a nominee or under a similar arrangement,
that other person, as well as persons in an ownership chain, to the
extent that it is held by the jurisdiction’s authorities or is within the
possession or control of persons within the jurisdiction’s territorial
jurisdiction.
69. In Jamaican company law, the term “nominee” has not been
defined but has been used in the context of a nominee of a body
corporate, including of a banking company and a finance company. It is
also used in defining the holding and subsidiary company. Section 59 of
the Securities Act provides for the investigation by the issuer from the
shareholder, holding shares otherwise than as a beneficial owner to find
out the beneficial owner and then confirming the holding from such
owner. But, this enquiry by the issuer of shares is limited against the
shareholders who have prescribed interest (10% of share capital) in the
share capital.
70. In case of a public company, the Securities Act 1993 has
given powers to the company to investigate the ultimate (real) owners
of the shares. The relevant excerpt of s.59 is provided below:
(3) Any issuer may by notice in writing require any member of the
issuer to indicate in writing, within such reasonable time as is
specified in the notice, whether any of the voting rights carried by any
shares comprised in the relevant share capital of the issuer held by him
are the subject of an agreement or arrangement under which another
person is entitled to control his exercise of those rights and, if so, to
give so far as it lies within his knowledge written particulars of the
agreement or arrangement and the parties to it.

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(4) Where an issuer is informed in pursuance of a notice given to my


person under subs. (3) that any other person is a party to such
agreement or arrangements is mentioned in subs. (3), the issuer may
by notice in writing require that other person within such reasonable
time as is specified in the notice to give, so far as it lies within his
knowledge, written particulars of the agreement or arrangement and
the parties to it.
71. The Companies Act also provides for the Minister, when
there are good reasons to do so to appoint inspectors to investigate and
report on the membership of a company for determining the true
persons that are financially interested in the company or are able to
control or materially influence the policy of the company (s.168). The
Minister may also require such information directly from the persons
whom he has reasonable cause to believe to be interested in the shares
or debentures of the company or that acts or has acted in relation to
those shares or debentures as the attorney or agent of someone
interested therein, without appointing inspectors (s.169).
72. Jamaica has clarified that the law does not require disclosure
of ultimate owners to any authority, where there is a chain of ownership
in the company. Nonetheless, the beneficial ownership can be
investigated where good reasons to do so exist. The Companies Act has
given power to the Minister to appoint the inspector to investigate and
report on the membership of any company and also for determining the
true persons who are or have been financially interested in the success
or failure of the company or able to control or materially influence the
policy of the company (s.168). Jamaica has also intimated that no
investigations have been carried out pursuant to s.168 of the Companies
Act. The Minister is also empowered to investigate the ownership of
any shares or debentures of a company by requiring the information
from a person deemed to have interest in the shares or debentures.
(s.169). In addition, financial institutions, subject to the Proceeds of
Crime Act and the related Regulations of 2007 which provide for
customer due diligence measures, are required to have the information
regarding the identity of the individuals that ultimately control or own
the corporate vehicle (see below).

Regulated entities
73. The BOJ licenses and registers merchant or commercial
banks, building societies, remittance companies and bureaux de change,
while the Financial Services Commission (FSC) supervises and
regulates the securities, insurance and private pensions industries. The

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applicants desirous of carrying out the regulated activities are required
to provide the necessary information for registration in the desired field
of activities. A company11 is required to submit the listing of directors
and their addresses, certificate of incorporation, list of shareholders and
their shareholding, audited financial statements, tax compliance
certificate and names and addresses of all persons beneficially owning
10% or more in aggregate of the outstanding stock. Therefore, the
ownership information with regard to the entities operating in the
regulated fields would be available with the regulator.
74. The Proceeds of Crime (Money Laundering Prevention)
Regulations of 2007 and related regulations provide for customer due
diligence measures and further provide for verification procedures to be
applied. The Revised 2007 BOJ Guidance notes (Guidance Note on the
Detection and Prevention of Money Laundering and Terrorist
Financing Activities) provides measures for the identification of
prospective customers. The measures require the following information
to be obtained for corporate vehicles, whether locally incorporated or a
foreign company other bodies corporate or partnerships formed in
Jamaica or overseas:
• certificate of Incorporation or certificate of registration;

• articles of Incorporation; or Partnership Deed;

• directors’ resolution authorising company’s management to engage


in transactions;

• financial institutions mandate, signed application form, or an


account opening authority containing specimen signatures;

• a financial statement of the business (audited, or in the case of


companies incorporated and in operation for under eighteen
months, in-house statements);

• a description of the customer's principal line of business and major


suppliers (if applicable);

• list of names, addresses and nationalities of principal owners,


directors, beneficiaries and management officers, including
evidence of the identity of the natural persons, that is to say, the
individuals that ultimately own or control the corporate vehicle;
11
http://www.fscjamaica.org/content.php?action=content&id=83.

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• group/corporate structure, where applicable.

75. When a corporate customer is a part of a group of companies,


the financial institution is required to ensure that it is fully aware of the
ultimate beneficial owners/controllers of the company and that it is
aware of any group arrangements or affiliates that could present a
reputation risk to the financial institution (Para. 52 of BOJ Guidance
Note 2007).

Ownership information held by service providers


76. Service providers including lawyers, accountants and agents
providing services in relation to the formation of companies are not
required to keep information on the ownership of the companies for
which services are provided.

Partnerships (ToR A.1.3)


77. The Partnership (Limited) Act 1853 is the statutory law
relating to the formation and governance of the limited partnerships in
Jamaica. In this type of partnership one or more partners, called general
partners, have unlimited liability for partnership debts and other one or
more partners have liability for those debts to the extent of the fund so
subscribed by them or the capital they have subscribed. The general
partners only have the authority to transact the business of the
partnership and legal actions in respect of partnership business can be
taken only against them. Limited partnerships are not allowed to carry
on the business of banking or insurance.
78. A limited partnership can be established by two or more
persons for carrying the business subject to the limitations and
conditions of the act. The persons desiring to form the limited
partnership as general partners are required to make and severally sign
a certificate which also contains the information about the names of all
the general partners and special partners, their place of residence and
the amount of capital which each special partner has contributed to the
common stock. The certificate also mentions the period at which the
partnership is to commence and period at which it will terminate. The
certificate is required to be filed with the Public Record Office. The
partnership is considered to have been formed only after a certificate,
probate and declaration is made, acknowledged, filed and recorded.
79. Modifications made to the limited partnership as regards the
names of partners, nature of business or in the capital or shares etc. is

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deemed to be dissolution of the partnership and such partnership then
takes the form of a general partnership. Similarly, if a limited
partnership is continued beyond the time originally fixed for its
duration without re-registration it is deemed to be taken to be a general
partnership. The Public Record Office must be kept informed by the
general and special partners of the partnership’s continued existence.
The terms of the partnership must be published in the government
gazette.
80. Jamaica does not have any statutory provisions governing the
general (ordinary) partnerships, wherein all the partners have unlimited
liability for the partnership debts. Such partnerships are governed by
the common law and the partnership agreement. This ordinary
partnership does not have a legal personality of its own.
81. The Registration of Business Names Act requires every firm
having a place of business in Jamaica and carrying on business to
register with the Registrar of Companies. This Act defines the “firm” as
an unincorporated body of two or more individuals, one or more of
individuals and one or more corporations, or two or more corporations,
who have entered in to partnership with one another with a view to
carrying on business for profit, but shall not include any unincorporated
company, which was in existence on the seventeenth day of June
eighteen hundred and sixty four”. Section 5 requires the name,
surnames, nationality, the usual residence and the other business
occupation (if any) of each of the individuals who are partners, and the
corporate name and the registered office or principal office of every
corporation which is a partner. Therefore according to this act,
unlimited and limited partnerships having a place of business in
Jamaica and carrying on a business will need to register with the
Registrar of Companies and provide the aforementioned information,
notably the names of the partners.
82. Every registration or renewal of registration remains valid for
three years from the date of certificate of registration and requires to be
renewed. Section 8 requires all the changes in the particulars of the firm
to be intimated to the Registrar. Section 13 requires the registrar to
issue a Certificate of Registration. Inspection of documents is allowed
by the registrar. (s.18). Section 9 provides the punishment for firms or
persons making default as to particulars.
83. Considering the provisions of the Registration of Business
Names Act, the identity information of the partners of the partnership
should be available with the Registrar of Companies. This information
should also be available with regard to partnerships formed outside

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Jamaica but having a place of business in Jamaica, as the requirement


of registration is with regard to the place of business in Jamaica.
84. Jamaica’s Stamp Duty Act 1937 also requires payment of
stamp duty on all articles of co- partnership or other agreements to that
effect. A copy of such agreement is stored at the Records Office,
pursuant to sections 2 and 6 of the records Deeds, Wills and Patent Act.
85. It is possible to have a partnership in Jamaica with all non-
resident partners. Sections 363(1) (b), 363 (3) and 365(1) (C) of the
Companies Act require that foreign partnerships register using Form 31
as a foreign company and included in that registration is a requirement
for information on the name of the foreign firm in the country of origin,
the names of all foreign directors and their addresses and also the
address of the foreign firm in the country of origin. Jamaica has not
clarified that whether all the partners of foreign firm will be considered
as foreign directors or only some partners who are considered as
working directors by the firm or the mangers. If the foreign firm has
legal persons as partners, then who would be considered as working
directors is also not clarified. Therefore, the information on all partners
of foreign firm may not be available.

Income tax law


86. Every person, including partnerships liable to pay tax, must
register with the Registration Authority as required by s.17D of the
Revenue Administration Act (RAA). The ITA does not define partner or
partnership, however, s.69 provides the manner of taxation of income
from a trade, profession or business carried on by two or more persons
jointly. The partnership is not considered to be a separate taxable
person, instead it is treated as a transparent entity through which
partnership income flows to the partners and such share of income is
included in the return of income of the partner. Section 69(2) sets forth
an obligation on the precedent partner to make and deliver a return of
income of the partnership. The income is required to be ascertained in
accordance with the provisions of the ITA. The return shall contain the
information about the names and addresses of the partners in the firm
together with the amount of income allocated to the partners as per their
respective shares. The ITA provides that when no partner is resident in
Jamaica the return shall be made and delivered by the attorney, agent,
manager or factor of the firm resident in the Island. The non-
registration of the partnership or non-delivery of the tax return is an
offence under the ITA (ITA s.69).

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87. Partnerships are required to file a return of income and tax
payable in form IT 03. This form is prescribed for organisations
(unincorporated bodies other than life assurance) and building societies,
trust estates, industrial and provident societies, deceased estates also
use this form. The form requires the following information on the
partners/beneficiaries in case of partnerships and estates:
• taxpayer registration number;

• name;

• basis of distribution of partnership income (salary, interest on


capital, good used, private use car, residential occupation, share of
balance and total share); and

• share of estate or trust income.

88. The identity of partners is required to be kept by the Public


Record Office under the Partnership (Limited) Act in case of limited
partnership and for all the partnerships under the ITA by tax authorities
in the form of return of income. The information of the partners is also
available with the Registrar of Companies as per the requirements of
the Registration of Business Names Act. The partners or any other
persons including the service providers are not required by law to keep
the ownership information. There is no provision under the law to
disclose the ultimate owners of the companies who are partners in the
partnership.

Foreign partnerships
89. There is no specific regulation with regard to foreign
partnerships.
90. The assessment team is of the view that under the common
law it is not necessary to have a deed for the creation of partnership. It
is also not necessary that all the partnerships obtain business
registration number and TRN from Jamaican authorities. The Jamaican
authorities have however indicated that any foreign partnership with
substantial presence in Jamaica due to carrying on business or trade is
taxable in Jamaica and is required to file a tax return, which contains
details of the partners in the firm.

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Trusts (ToR A.1.4)


91. Jamaica allows for the creation of trusts under its common
law. However, it does not have specific laws which regulate the
creation of trusts. The Trustee Act 1897 is in operation providing for the
rights and responsibilities of the trustees. Powers and duties of trustees
relate to appointment of new trustees, purchase and sale and various
powers and liabilities of trustees. Powers of the court are with regard to
the appointment of new trustees and vesting orders, relief for breach of
trust and plea of statute of limitation. Section 10(6) provides for
recording of new appointment in the record office, or in the office of
the registrar of titles as to property registered under the registration of
titles act of the Island.
92. The Trustees Act defines the trust as not including the duties
incident to an estate conveyed by way of mortgage; but with this
exception the expressions “Trust” and “Trustees” include implied and
constructive trusts, and cases where the trustee has a beneficial interest
in the trust property, and the duties incident to the office of personal
representative of a deceased person.
93. Section 3 dealing with authorised investments indirectly
refers to creation of trust by the instruments (if any), meaning that trusts
in Jamaica may be non-statutory trusts, which are also referred as
common law trusts. The trusts can be created by the instruments or
orally. A common law trust relies on the rights of the trustees and such
trusts possess the same rights, privileges and immunities as the trustees.
94. Section 4 of the Records of Deeds, Wills and Letters Patent
Act 1681 provides that the records of any deeds executed and proved or
acknowledged and enrolled in the Record Office will constitute
conclusive evidence of the transaction or arrangement the deed refers
to. The same applies to last will and testament.
95. The Record Office Act 1879 deals with the law relating to
public records. A deed after recording in the record office becomes the
registered deed. The record office maintains records and enrolments of
registered deeds and writing in the form of records and registers. Rule 5
of the Rule of Record Office requires the maintenance of an abstract
book in the prescribed from, which includes information about the
grantor (in the case of trusts the settlor) and grantee (trustee) of the
deed. Section 33 of the Record Office Act provides that all persons may
search, exam and take abstracts of the public records. Jamaica has
advised that the record office has been recording deeds since 1660 and
there are currently approximately three million recorded trust deeds

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96. Jamaica has stated that, the persons required to comply with
revenue law are mandated to register all deeds; whether it is a deed of
conveyance or otherwise. Pursuant to s.2-4 of the Stamp Duty Act and
the attached Schedule and sections 2 and 6 of the Records, Wills and
Patent Act, all deeds are required to be stamped and recorded at the
Records Office.
97. Section 4 of the Registration of Business Names Act provides
for the registration with Registrar of Companies by a nominee or trustee
and reads as follows:
Where a firm, individual, or corporation having place of business in
Jamaica carries on the business wholly or mainly as nominee or
trustee of or for another person, or other persons, or another
corporation, or acts as general agent for any foreign firm, the first
mentioned firm, individual, or corporation shall be registered in
manner provided by this Act ,and ,in addition to the other particulars
to be furnished and registered, there shall be furnished and registered
the particulars mentioned in the schedule”. The schedule requires the
additional particulars as the present Christian name and surname, any
former name, nationality, and, if that nationality is not the nationality
of origin, the nationality of origin, and usual residence or, as the case
may be, the corporate name, of every person, or corporation on whose
behalf the business is carried on: provided that if the business is
carried on under any trust and any of the beneficiaries are a class of
children or other persons, a description of the class shall be sufficient.
98. The above provisions indicate that is case of trust the full
information on beneficiaries is not required to be given if the same are a
class of children or other persons.
99. For registration under the business names act, the trusts are
required to submit the trust deed which has information on the
beneficiaries. A total of 999 trusts and 1 544 non-profit organisations
have obtained tax registration numbers (TRN). The TRNs are used to
register trust deeds for the purpose of tax administration. .
100. The trust not being a statutory entity, the information on
trusts is not in the public record except as discussed above, and the
details of the trust and the identities of those involved known to the
settler and the trustees only. Jamaica was asked to clarify whether the
information about all trusts created or administered in Jamaica would
be available with Record Office. However, Jamaica’s reply, is that the
Record of Deeds, Wills and Patent Act requires that all deeds, patents,
letters and wills should be recorded at the Island record office and any
deed not so recorded is void. There are neither restrictions on nor

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special provisions for the creation of trusts in Jamaica for non-resident


settlor or beneficiaries. There is no restriction for a resident of Jamaica
to act as trustee of a trust formed under foreign law and this situation is
covered in the Registration of Business Names Act.

Income tax law


101. The Revenue Administration Act 1985 requires the trusts to
obtain a taxpayer registration number. The completed application form
’Form 2’ signed by a trustee and trust deed, TRN for each trustee and
ID for signatory officer is required to be filed. All trusts, except
approved charitable trusts, are required to file income tax returns. The
approved charitable trusts are required to file their annual financial
statements to the Taxpayer Audit and Assessment Department. This
also applies to trusts having non-resident settlors or beneficiaries.
102. Any payments made by the trustee out of the trust’s income
to the beneficiaries is subject to a withholding tax, unless the
Commissioner authorises the trustee(s) to make the payments gross,
after being satisfied that the beneficiary concerned is not obliged to file
a tax return (ITA s.6(6)). In the tax returns the information about the
share of estate or trust income allocated to all the persons is required to
be given.
103. Trusts created under foreign laws will also have to register
for tax purposes and deliver a tax return, if those have any taxable
income (ITA s.5) or statutory income (ITA s.6) This situation will arise
in cases where either the trustee is a resident of Jamaica or the trust
assets are invested in Jamaica or the trust assets are administered from
Jamaica. Trustees are responsible for compliance with the ITA (s.55).
104. The Proceeds of Crime (Money Laundering Prevention)
Regulations 2007 provides that the satisfactory identity is required to be
maintained by the regulated entity with regard to settlor, legal owner or
other person who exercises effective control of the legal arrangement
and also the beneficial owner in the case of a transaction involving a
settlement, trust or other type of legal arrangement.
105. Another type of arrangement is the unit trusts. This is an
arrangement for collective investment in Jamaica or elsewhere in any
property under a trust deed which enables the beneficiaries to
participate in the profits or income of the property. It is governed by the
Unit Trusts Act 1970. These trusts are regulated entities under POCA
2007, by the Financial Services Commission and ownership and

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identity information on the units of trusts is required to be kept by such
trusts.
106. In cases of trusts also, the assessment team is of the view that
it is not necessary that all the Trusts obtain business registration number
and TRN from Jamaican authorities. The Jamaican authorities have
only stated that information will be available with regard to Trusts
doing business with Revenue and they have not categorically asserted
that all the Trusts are required to obtain such numbers/ registration.

Foundations (ToR A.1.5)


107. Jamaica does not have specific provisions for the creation of
foundations; however Jamaica has submitted that a foundation can be
created in the form of a company limited by guarantee. It has further
explained that the provisions of Companies Act, Income Tax Act and
Securities Act apply to foundations as those that apply to companies.

Enforcement provisions to ensure availability of information


(ToR A.1.6)
108. Companies including its officers are subject to fines under the
Companies Act for failure to maintain documentation required by the
Act. For the defaults relating to register of members, the company and
every officer of the company who is in default is liable to a fine up to
JMD 50 000 (i.e. about EUR 500) (s.109 §4). Every company is obliged
to deliver annual return to the registrar of companies and default to
deliver the return as required leads to a penalty of JMD 100 (EUR 1)
for each day of default continues, but maximum penalty is limited to
JMD 10 000 (s.121).
109. Penalties for non-registration under the Revenue
Administration Act may be levied to taxpayers, who without reasonable
cause or lawful excuse neglects or fail to apply for registration or
neglects or fail to furnish the information required for registration. The
person is liable on summary conviction before a Resident Magistrate to
a fine not exceeding JMD 1000 in the case of an individual or JMD
5000 in the case of any other person and in default of payment of such
fine to imprisonment for a term not exceeding 30 days (s.17D(8))
110. A wilful failure to deliver a true and correct return of the
income and comply with the other provisions of s.67 of the ITA makes
the person guilty of an offence (ITA s.67(8)) Any person who refuses
fails or neglects to deliver any return of the partnership shall be guilty
of an offence (ITA s.69(3))

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111. Section 100 of ITA provides that any person guilty of an


offence against ITA for which no specific penalty is provided shall be
liable on summary conviction before a resident Magistrate to a fine not
exceeding JMD 10 000 (EUR 100) and in default of payment to
imprisonment with or without hard labour for a term not exceeding 12
months.
112. Section 8 of the Registration of Business Names Act requires
that any change in particulars need to be sent to the Registrar and any
default shall be liable on summary conviction before a resident
Magistrate to a fine up to JMD 200 for each day of the default and the
default of in the payment of the fine may result into imprisonment with
or without labour for a term up to 3 months.
113. Non-compliance by a regulated entity with the financial
regulations, such as regulations under POCA, could result in the
suspension or revocation of the licence.
114. The effectiveness of the enforcement provisions which are in
place in Jamaica will be considered as part of the Phase 2 review.

Determination and factors underlying recommendations


Determination
The element is in place, but certain aspects of the legal
implementation of the element need improvement
Factors underlying Recommendations
recommendations
Information is not required to be Jamaica should establish a
maintained by a company nor is requirement that information is
it otherwise available to the maintained indicating the person on
competent authority that whose behalf any legal owner holds
identifies the persons in an his interest or shares in the company
ownership chain where a legal or body corporate. This could, for
owner of a company acts on example be achieved by way of
behalf of other person as a requirements on companies and
nominee or under similar bodies corporate themselves, or
arrangement. alternatively via the information
submitted to the Registrar of
Companies.

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While share warrants to bearer Jamaica should take necessary


are no longer issued in Jamaica, measures to ensure that robust
there are insufficient mechanisms mechanisms are in place to identify
in place that ensure the the owners of these share warrants
availability of information allowing to bearer.
for identification of the owners of
existing share warrants to bearer.
Companies incorporated outside As Jamaica asserts a sufficient
of Jamaica but having their nexus for taxing jurisdiction on a
central management and control management and control basis, it
in Jamaica are not required to should require submission of
provide information identifying information on its owners when
their owners as a part of foreign companies register or when
registration requirements and they apply for their tax file number
foreign companies are not and Jamaica should take necessary
required to compulsorily keep a steps to require foreign companies
share register in Jamaica. to keep register of Jamaican
Therefore, the information that shareholders in Jamaica.
identifies the owners of foreign
companies is not available.

A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for
all relevant entities and arrangements.

General requirements (ToR A.2.1)


115. The Companies Act (s.144) requires every company to keep
proper books and documents of account to give a true and fair view of
the state of the company’s affairs and to explain its transactions. These
books and documents of account are with respect to all sums of money
received and expended by the company, matters in respect of which the
receipt and expenditure takes place, all sales and purchase of goods by
the company and the assets and liabilities of the company. The books
and documents of account are required to be at all times open to
inspection by the directors. The failure of a director to take all
reasonable steps to secure compliance by the company resulting in a
default by the company makes such director liable on summary
conviction before a Resident Magistrate to imprisonment with or
without hard labour for a term not exceeding six months or to a fine not
exceeding fifty thousand dollars. However, the Minister may, according
to the nature and volume of the business carried out by the company in

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Jamaica, issue an order grant that exempts the company from keeping
proper books and documents of account (s.144(4)).
116. Section 144 of the Companies Act refers to the maintenance
of books of accounts by the company, as are necessary to exhibit and
explain the transactions and financial position of the trade or business
of the company including books containing entries from day to day in
sufficient details of all cash received and cash paid and goods sold and
purchased showing the goods and the buyers and sellers in sufficient
detail to enable these goods and their buyers and sellers to be identified.
117. The profit and loss account and balance sheet of the company
is required to be presented before the company at the annual general
meeting by the directors of the company (s.145). Furthermore, if the
company is registered on the Jamaica Stock Exchange, its balance sheet
must be published at the end of each financial year. The director of the
company is liable for the penalties as in the case of the offence of not
maintaining the proper accounts and not complying with the provisions
presenting the profit and loss account and balance sheet before the
company in the general meeting.
118. All public companies are required to file accounts annually to
the Registrar of Companies. This requirement also applies to private
companies wherein a body corporate is shareholder. These accounts are
in the form of the balance sheet and profit and loss account including
all the documents required by law to be annexed thereto and a copy of a
report of the auditor (s.124).
119. Section 18 of the Banking Act 1992 requires every local bank
and foreign bank to submit an audited balance sheet and profit and loss
account in respect of all businesses transacted by the bank in the
financial year and auditor’s report to the Bank of Jamaica. The accounts
are required to be prepared in accordance with the generally accepted
accounting principles as set out in the Handbook of the Institute of
Chartered Accountants of Jamaica. The bank is also subject to the
statutory publication requirements.
120. A company incorporated outside the Island and carrying on
business within the Island is required to prepare a balance sheet and
profit and loss account containing the particulars and documents,
similar to, as are required by a company incorporated in the island and
it is also required to deliver a copy of these documents to the Registrar
of companies for registration (s.366).
121. Section 89 of the ITA also requires every person to keep
proper books of accounts sufficient to record all transactions necessary

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to ascertain gains or loss. Domestic and foreign companies carrying on
business in Jamaica are required to keep their accounting records in
Jamaica and required at all times to have these open to inspection by
the directors. Exemption from keeping the records in Jamaica can be
authorised by an order of the Minister (s.144 (4)).
122. Private companies are subject to limited filing requirements
with the Registrar of Companies (s.124(3)). However, as mentioned
previously if a body corporate holds shares in the private company then
the exemption in this regard is not available.
123. The Partnership (Limited) Act and Trustees Act impose no
record keeping requirements on partnerships or trusts. However, s.89 of
the ITA imposes a compulsory requirement on every person engaged in
any trade, profession or business to keep proper books of account
sufficient to record all transactions necessary to ascertain the gains and
profits or loss incurred. The books of account should exhibit or explain
his transactions and financial position. In absence of proper books of
account, the Commissioner is empowered to assess the tax according to
the best of his judgement. Failures to comply with the provisions also
attract various penalties. As a result, taxpayers keep proper books of
account and records.
124. Similarly, entities operating in the Jamaica Export Free Zones
have to be companies incorporated in Jamaica. Section 46 of the
Jamaica Export Free Zones Act provides for the sanctions as per s.99 of
the ITA with regard to filing of false statements, false returns and for
keeping false accounts. Therefore, though these companies are not
liable to pay tax, these are required to maintain accounts.

Underlying documentation (ToR A.2.2)


125. The Companies Act does not specifically provide for the
maintaining of underlying documents. The only reference to the
underlying records is found in s.157 which requires that the auditor
shall have access to the books and accounts and vouchers of the
company.
126. Neither the Partnership Act nor the Trustee Act includes any
requirements to keep accounting records or underlying records.
However, s.89 ITA (discussed above) provides that, “a person shall be
deemed not to have kept proper books of account if he has not kept
such books or accounts as are necessary to exhibit or explain his
transactions and financial position in his trade or business, including a
book or books containing entries from day to day in sufficient details of
all cash received and cash paid, and, where the trade or business has

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involved dealings in goods, statements of annual stocktakings, and


accounts of all goods sold and purchased”. This provision imposes the
requirement of maintaining accounts to substantiate the transactions but
does not clearly refer to include the underlying documentation.

5-year retention standard (ToR A.2.3)


127. Neither the Companies Act nor the Partnership (Limited) Act
nor the Trustee Act prescribes a time period for the retention of
documents.
128. For the retention of records in case of dissolution of
companies, s.330(3) states that the Court may decide on the period of
time in which the books and papers of the company cannot be destroyed
(in any case not exceeding five years from the dissolution of the
company). However, Jamaica has not reported making of any rules in
this regard and has responded that currently there are no such rules. In
practice, according to the information provided by Jamaica, documents
are held at least 20 years pursuant to s.338(1)(b) of the Companies Act.
Jamaica has further stated that review is currently underway aiming at
adoption of proper retention of information/documents policy.
129. Jamaica has asserted that “Accounting records are required to
be kept for six years in keeping with the limitation period set out in the
Limitation of Actions Act.
130. Section 51 of the Limitation of Actions Act 1881 deals with
the limitations of actions for ‘merchants’ accounts with respect to the
trade of merchandise between merchants to a period of six years after
the cause of such actions. This provision merely deals with the
limitations with regard to making merchants claim and it would be in
the interest for concerned merchants to maintain related documentation
for a period of six years to substantiate the claims. But, this is not a
requirement under the law and if a merchant does not maintain the
records it might lose the claims.
131. In addition, s.21(3) of the Tax Collection Act 1867 provides a
limitation of seven years for the collection of taxes from a person. This
means that the revenue department may conduct audits of taxpayers
within seven years of the date at which collection of taxes was due.
Therefore, it is in the interests of Jamaican taxpayers to maintain related
documentation for a period of seven years. But the fact remains that
there is no legal requirement to retain accounting records by the
persons.

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132. Where the company is dissolved, the information held by the
government entities is kept for the required period and then stored at the
government archives for up to 20 years pursuant to the Financial
Administration and Audit Act 1959.
133. The Bank of Jamaica, as per s.34A of the Bank of Jamaica
Act 1960, has power of supervision and periodical examination of all
commercial banks and financial institutions. The regulated entities
under the supervision and control of the BOJ and Financial Services
Commission are required to maintain the record of their customer
transactions for at least five years in view of the anti-money laundering
provisions.
134. On the basis of above, the assessment team determines that
Jamaican law does not expressly provide for the retention of the
accounting records for five years, except by the entities regulated by the
anti-money laundering laws.

Determination and factors underlying recommendations


Determination
The element is in place, but certain aspects of the legal
implementation of the element need improvement
Factors underlying Recommendations
recommendations
There is no clear requirement Relevant legislation for each type of
that relevant entities and entity and arrangement should
arrangements keep underlying provide for the obligation to keep
documentation. underlying documentation. Jamaica
could, for example, ensure the
maintaining of records and
underlying documents by prescribing
tax audits of persons having a
turnover in excess a threshold
amount.
The Jamaican company and The relevant laws should be
tax laws does not prescribe a amended to specify the retention
compulsory retention period for period of at least five years in respect
records, other than for financial of accounting records for all the
institutions and other entities entities.
regulated under anti-money
laundering legislation.

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A.3. Banking information

Banking information should be available for all account-holders.

135. Regulation 7 of the POCA (MLP) Regulations 2007


establishes minimum customer due diligence requirements and defines
“customer information” as including the applicant for business’s full
name, current address, tax payer registration number, date and place of
birth (in the case of natural person) and, where applicable, the
information referred to in regulation 13(1) (c) (i.e. identity of the
beneficial owner).
136. Section IV of the BOJ AML/CFT Guidance Notes requires
every bank /financial institution to obtain the information from all
prospective customers about their identification. This information
comprises the true name and names used, permanent address, including
postal address, date of birth, nationality, sources of funds, contact
numbers and tax payer registration number. The POCA (MLP)
Regulations 2007 also require the periodic updates of customer
information at least once every five years. This requirement is also
applicable to the existing client base of the financial institutions.
137. Regulation 16 of the POCA (MLP) Regulations 2007
specifically prohibits financial institutions from maintaining
anonymous, fictitious or numbered accounts. Paragraph 93 of the BOJ
AML/CFT Guidance Notes also prohibits the maintaining of such
accounts.
138. Regulations 11 to 13 of the POCA (MLP) Regulations 2007
requires procedures to be in place to ensure that the identities of both
principals and agents are obtained, and that the authorisations of agents
are obtained in the case of transactions being conducted by a person on
behalf of another.
139. Regulation 13C of the POCA (MLP) Regulations 2007
stipulates that measures are satisfactory where in the case of any
transaction involving settlements, trusts or other types of legal
arrangements, the identity of the settler, legal owner or other person
who exercises effective control of the legal arrangement as the case
may require, or the beneficial owner, is established. Supporting this,
paragraphs 73 and 74 of the BOJ (AML/CFT) Guidance Notes
specifically require the due diligence measures in relation to legal
arrangements include identification of all parties and beneficiaries
concerned, the source of funds and the source of wealth and trust
arrangements.

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140. The BOJ AML/CFT Guidance Notes also requires financial
institutions to ensure that the due diligence checks and reviews and
investigations are available to the competent authority and designated
authorities under the anti money laundering laws.
141. POCA (MLP) Regulations 2007 provides for maintenance
and retention of the records of transactions between the banks and the
customers by the banks, the banks are also required to maintain
transaction records relating to walk-in customers.

Record-keeping requirements (ToR A.3.1)


142. The supervisory authorities under the POCA are Bank of
Jamaica and Financial Services Commission. POCA is applicable to
financial institutions and designated non-financial institution (as
designated by the Minister), including:
• a bank licensed under the Banking Act;

• a financial institution licensed under the Financial Institutions Act;

• a building society registered under the Building Societies Act;

• a society registered under the Co-operative Societies Act;

• a person who—

(i) engages in insurance business within the meaning of the Insurance


Act;
(ii) performs services as an insurance intermediary within the
meaning of the Insurance Act, but does not include an insurance
consultant or an adjuster;
• a person licensed under the Bank of Jamaica Act to operate an
exchange bureau;

• a person licensed under the Securities Act as a dealer or investment


adviser;

• approved money transfer and remittance agents and agencies as


defined by s.2 of the Bank of Jamaica Act;

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• any other person declared by the Minister responsible for national


security, by order subject to affirmative resolution, to be a financial
institution for the purposes of the POCA.

143. The Caribbean Financial Action Task Force (CFATF) report


of 200512 analysed Jamaica’s compliance with the international
AML/CFT standards. That report mentioned that, certain financial
businesses are excluded from the application of AML/CFT regime; for
example, money lenders, pawnshops and insurance brokers. The
Jamaican authorities had indicated that while there was a move to bring
the moneylenders and insurance brokers’ under the ambit of the
AML/CFT regime; pawnshops are very limited in number and did not
constitute a major area of risk. It is observed that POCA provisions
cover the insurance companies and insurance intermediaries. Also,
money lenders and pawnshops do not hold accounts for their customers.
144. CFATF’s follow up report13 (6 March 2009) on Jamaica
mentions that the POCA (MLP) Regulations 2007 require keeping the
identification and transactions records for a period of five years after
the transaction. The report does not refer to any adverse findings in this
regard.
145. Regulation 14 of the Money Laundering Prevention
Regulation 2007 provides that records be kept for a “period of five
years commencing with the date on which the relevant financial
Business was completed or the business relationship was terminated
whichever occurs later”.
146. Further, Regulation 16 of the POCA (MLP) Regulations 2007
mandates the retention of both identification records and transaction
records by financial institutions for the prescribed period of 5 years
commencing from the date on which the relevant financial business was
completed or the business relationship terminated whichever is later.
147. Supporting these regulations, the BOJ has issued the
AML/CFT Guidance Note in 2004 (revised in 2007) and Section IV.D
of this note deals with record keeping requirements and its important
features are:

12
http://www.cfatf-gafic.org/downloadables/mer/
Jamaica_3rd_Round_MER_(Final)_English.pdf.
13
http://www.cfatf-gafic.org/downloadables/Jamaica_1st_Follow-
Up_Report_(Final)_English.pdf.

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• financial institutions should maintain records of client
identification and transactions performed. This should include the
minimum five year retention period from the termination of the
business relationship;

• records relating to transactions carried out by each customer must


be maintained for at least five years after the transaction has been
completed.

148. The customer information has broad definition under POCA


and the regulated financial institutions are required to maintain the
customer information.

Determination and factors underlying recommendations


Determination
The element is in place

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B. Access to Information

Overview

149. A variety of information may be needed in a tax enquiry and


jurisdictions should have the authority to obtain all such information.
This includes information held by banks and other financial institutions
as well as information concerning the ownership of companies or the
identity of interest holders in other persons or entities, such as
partnerships and trusts, as well as accounting information in respect of
all such entities. This section of the report examines whether Jamaica’s
legal and regulatory framework gives the authorities access powers that
cover the right types of persons and information and whether rights and
safeguards would be compatible with effective exchange of
information.
150. The ITA provides that the Minister may issue rules for the
carrying out of provisions in agreements made with other States as
appear necessary or expedient to the Minister in consequence of such
arrangement. However, Jamaica has not enacted any specific rules or
regulations for the carrying out the provisions with respect to the
exchange of information contained in agreements with treaty States.
The legal basis for providing the necessary access and powers to the
competent authorities is that which is available under its domestic laws.
The report identifies potentially significant deficiencies in the Jamaican
authorities’ powers to obtain information for the exchange of
information purposes. The most significant of these deficiencies is that
the tax authorities can only obtain information where the taxpayer is
under examination in Jamaica. That is, an audit must be commenced in
order to gather information to respond to an international request for
information. For example, if a treaty partner wishes to obtain
information about a bank account of its taxpayer in Jamaica, the
Jamaican competent authority would be able to obtain information from
bank only if two conditions are met namely; the person should be a
taxpayer in Jamaica and tax proceedings should be in progress. In
absence of a pending tax examination, the domestic laws do not grant
competent authorities the power to obtain information.

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151. The tax authorities are required to request the information
from the taxpayer prior to seeking the production order from the court.
The taxpayer rights are duly protected through the judicial proceedings
though the laws specifically do not lay down the clear rules,
corresponding to the standards, providing for the safeguards to the
taxpayer and third parties.

B.1. Competent Authority’s ability to obtain and provide


information

Competent authorities should have the power to obtain and provide


information that is the subject of a request under an exchange of
information arrangement from any person within their territorial
jurisdiction who is in possession or control of such information
(irrespective of any legal obligation on such person to maintain the
secrecy of the information).

152. Section 83 of the ITA provides the power to the Minister to


make orders declaring arrangements with other territories for the
purpose of relief from double taxation. The Minister of Finance is the
competent authority for the DTC/TIEA purpose in Jamaica. The role of
the competent authority has been delegated by the Minister to the
Director General of Tax Administration. The competent authority does
not have any power to obtain the information directly from the taxpayer
or a third person. The competent authority, when requested by the
foreign counterpart, obtains the information through the field
authorities, which have powers under the Income Tax Act 1955 and the
Revenue Administration Act 1985.
153. Section 17F of the Revenue Administration Act (RAA)
provides for disclosure of information among authorities within the
various departments of revenue. The obligations as to secrecy or other
restrictions upon the disclosure of information imposed by any law will
not prevent such disclosure of information. The information obtained
can also be disclosed for the purpose of any proceedings connected
with a matter in relation to which the Commissioner or the other officer
performs his duties. These specific provisions and other provisions
specified in s.83 of the ITA allow the competent authority to seek
required information from the Commissioners.
154. The tax authorities have powers under the Revenue
Administration Act and the Income Tax Act to obtain information. The
RAA provides powers relating to obtaining information from third
parties, inspection, verification and search and seizure. The powers

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under the RAA may only be exercised when the person about whom
information is sought is under examination by the tax authorities in
Jamaica. The provision is used where the information is being sought
from specified bodies such as banks, building societies or other
financial institutions and the Commissioner must proceed by court
order.
155. Section 70(1) of the ITA provides as follows:
Every person, whether he is or is not liable to pay income tax, upon
whom the Commissioner of Inland Revenue may cause a notice to be
served requiring him to make and deliver a return of his income or
the income of any person, shall, within fifteen days after the date of
the service of such notice, make and deliver to the Commissioner of
Inland Revenue a return as aforesaid.
156. The Commissioner may therefore use this provision, in cases
falling outside the scope of the RAA, to seek information about the
income of any person. That person does not have to be under
examination by the tax authorities.
157. The Jamaican authorities acknowledge that there is some
conflict between both provisions and that there is a need to rationalise
the provisions so as to provide for the widest possible information
gathering powers.

Information from government authorities


158. The Commissioner of Inland Revenue can seek information
from any public officer for the purposes of the Income Tax Act. It is the
duty of the public officer to furnish information which may be in his
possession or which he may be able to procure.
159. The Postal Corporation of Jamaica carries out certain types of
services as an agent. These include bill payments, sale of lottery tickets
and acting as collection agent for a micro-lending agency (a subsidiary
of a supervised deposit taking entity). Information relating to these
transactions would be available through the principal operators who are
incorporated under the Companies law and who are subject to income
taxes. In the case of the micro-loans operations, these would also be
subject to the jurisdiction of the Supervisor of Banks (under
consolidated supervision powers).
160. The Postal Corporation has indicated its intention to offer
remittance services. To do so would require licensing under the Bank of
Jamaica Act. If this occurs, the Postal Corporation would be subject to

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supervision by the Bank of Jamaica and talso be subject to AML/CFT
statutory obligations.
161. Under the Income Tax Act, information relating to postal
revenue is not available directly to the Commissioner of Inland
Revenue. However, postal workers are deemed to by the Postal Act to
be customs officers for the purpose of receipt of postal articles. All
information regarding articles imported through the post office and the
customs duties payable would be available to the Commissioner of
Customs.

Powers under the Income Tax Act


162. Section 70 of the ITA empowers the Commissioner of Inland
Revenue to issue a notice on any person, whether he is or not liable to
pay income tax, to require such person to deliver the return of income,
require their attendance and to give evidence with respect to his income
and to provide copies of accounts including balance sheets relating to
trade, profession or vocation and audit report, if any, and make
inspection of books, accounts and documents containing information
about the transactions. Under these provisions, the Commissioner‘s
powers can only be exercised when conducting enquiries with regard to
income of the taxpayer, whether he is liable to pay tax or not.
163. For the purpose of the assessment of a taxpayer who has been
issued the assessment notice and has disputed the assessment and the
Commissioner has received the notice of objection, the Commissioner
under s.75(5) of the ITA may by notice summon any person to give
evidence respecting the objected assessment to attend before him and
may examine such person under oath or otherwise.
164. The Commissioner also has powers under s.91 of the ITA in
connection with the filed tax return or for making the assessment.
Under this section the Commissioner has same powers as available to
him under s.75(5) of the ITA discussed above. These powers are
available to the Commissioner for the following purposes:
• to verify the correctness of any return, statement, declaration, or
particulars delivered under the ITA;

• for obtaining information required for the issue of notice under


s.66(3) – a notice issued for failure to declare estimated income
tax; and

• for making assessment under s.72(3) of the ITA.

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165. Related to this is s.91(2) of the ITA, which empowers the


Commissioner to authorise any person for the purpose of verifying the
correctness of any return, statement, declaration or particulars delivered
under the ITA to enter upon any premises of the taxpayer between
hours of nine in the morning and nine at night and inspect and make
copies of any books, documents, or other material relating to return,
statement, declaration.
166. In accordance with the ITA, the competent authorities may
only exercise their enquiry, investigation, verification and inspection
powers in the conduct of an assessment, examination or when dealing
with an objection to a tax assessment.

Powers under the Revenue Administration Act (RAA)


167. Information may also be obtained by the Commissioner on
the basis of the powers under the Revenue Administration Act. The
procedure to obtain information from third parties such as banks and
other financial institutions is provided for under s.17G RAA. However,
the law provides that the information first has to be requested from the
taxpayer. Where the taxpayer does not co-operate, the Commissioner
may apply to a Judge in Chambers for a production order to compel the
third party to produce the requested information. Such an order can be
requested in relation to the person suspected of having possession or
control of the information, document or record which is relevant to the
duties of the Commissioner in relation to making an assessment in
relation to a taxpayer under any relevant law, making an investigation
into any case involving tax evasion or for the prevention of fraud on the
revenue, determining the tax liability of a taxpayer under a relevant law
or collecting outstanding tax due. Such an order can be used to obtain
information from:
• a bank licensed under the Banking Act;

• a financial institution licensed under the Financial Institutions Act;

• a person licensed under the Public Accountancy Act;

• a building society registered under the Building Societies Act;

• a society registered under the Cooperative Societies Act or the


industrial and provident Societies Act;

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• a person who is or has been a party to any business transaction with
the taxpayer in question.

168. A Judge in chambers may issue a production order after


satisfaction that the Commissioner concerned has requested the
information, document or record from the taxpayer without success and
in all the circumstances of the case, there are reasonable grounds for
making the order. The production order overrides the secrecy
obligations imposed on the person relating to disclosure of information
under any other acts.
169. The RAA defines the taxpayer as “includes any person whose
liability to make payment of revenue to a revenue department is in
question whether or not , in the event, the payment is waived or
remitted or no amount is found to be payable”. In the RAA the revenue
department means, the Customs Department, the Inland Revenue
Department, the Land Valuation Department, the Revenue Protection
Department, the Tax Administration Services Department, the Tax
Payer Appeals Department and the Taxpayer Audit and Assessment
Department. The scope of responsibilities of Commissioners working in
these departments is also prescribed in the RAA.
170. For the purpose of enforcement of tax collection, the
Commissioner has powers to make enquiries, inspect documents and
search premises. Section 17I of the RAA provides that the
Commissioner or authorised person for the purpose of exercising any
power under a relevant law may enter during office hours the business
premises of a taxpayer for carrying out the audit or examination of any
accounts, books, records or any other documents relating to that
business or inspect any property or goods described in the inventory.
The person responsible for the operation of the business is required to
permit the Commissioner or authorised person to make copies of or
take extracts from the documents or record. Therefore, these powers
can be used in case of a taxpayer only.
171. Section 17J of the RAA provides for the issue of a search
warrant by the Judge of the Revenue Court authorising the
Commissioner or authorised person named in the warrant to enter and
search the specified premises. The search warrant can be issued by the
judge on being satisfied on the basis of information under oath by a
Commissioner indicating the necessity for search on the grounds
indicated in the section. The warrant empowers the authorised person to
make copies of books/documents and also detain and remove the
documents for the purpose of making the copies, but the period of
detention does not exceed seven days. The authorised person can take

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inventory of any money, jewellery, bullion, stocks or other valuables


found at the premises. The reasonable grounds for forming the
satisfaction are:
• fraud has been committed by a taxpayer and evidence of such fraud
is to be found on the premises specified in the information; or

• a taxpayer has failed to comply with any requirement of a relevant


law relating to the furnishing of information or the production of
any documents or records; and the payment of any tax which that
taxpayer is liable to pay under that law; and any notice served on
that taxpayer by the Commissioner or any requirement made by the
Commissioner in relation to the furnishing of information, the
production of documents or records or the payment of tax.

172. The assessment team has analysed the powers available to the
tax authorities under the ITA as well as the RAA in connection with
obtaining information, and is of the view that the powers under the
RAA can be used in connection with the continuing tax examination in
case of a taxpayer in Jamaica. However, the powers available under the
ITA are wide and may be used against any taxpayer in Jamaica without
need for an examination to be conducted.
173. However, the problem lies on the question, whether the duties
of the Commissioner with regard to making an investigation into any
case involving tax evasion or for the prevention of fraud on the
revenue, would cover a case of a person being taxpayer in a foreign
jurisdiction with whom Jamaica has agreement in place for exchange of
information and information is sought by the competent authority of
that jurisdiction. Section 6(2) of the RAA provides that it shall be the
duty of the Revenue Protection Department to carry out investigations
into cases involving fraud against the revenue. The RAA defines the
revenue to mean all tolls, taxes, imposts, rates, duties, fees, levies,
fines, and other charges prescribed by or under any enactment. The
answer to this query would depend upon, whether the term “revenue”
also includes taxes levied in the foreign jurisdiction. This becomes an
interpretation issue and the assessment team does not wish to conduct
this exercise and may not be appropriate do so.
174. The assessment team is of the view that the tax authorities do
not have well defined powers to obtain information in the cases of
persons who are not taxpayers in Jamaica. This view is strengthened by
the language of RAA s.17G which requires the judge before issuing a

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production order to be satisfied that the Commissioner had first made
request to the taxpayer without success.
175. To conclude, the assessment team is of the view that the
powers of the tax authorities under the Revenue Administration Act and
the Income Tax Act are restricted so they can obtain information in case
of a taxpayer of Jamaica only and this is tantamount to the presence of
domestic tax interest in the tax laws of Jamaica.

Powers under other acts


176. The tax authorities have powers to request information from
public officers. The information might be available with them or they
should be able to procure it from the persons with whom the same is
available.
177. Under the Companies Act, the Registrar (public officer as per
s.351 of the Companies Act) or other government authorities do not
have powers to obtain information from the company, except the
powers of inspection provided in sections 160 to 171 of the Companies
Act. The Minister can authorise inspections on the basis of grounds
stated in the relevant sections. These inspections are of two types: i)
investigation of a company’s affairs and of related companies, and ii)
investigations into the ownership of the companies. Section 352(2) of
the Companies Act requires that a process for compelling the
production of any document kept by the Registrar can only occur under
a court order.

Ownership and identity information (ToR B.1.1)


178. Information is required to be held by banks and financial
institutions about their customers. (see earlier analysis of the AML
laws, regulations and guidance note). The information about the
identity and ownership of building society registered under the Building
Societies Act and a society registered under the Cooperative Societies
Act or the Industrial and Provident Societies Act can be obtained from
them by following the procedure available under s.17G of the RAA.
179. The Tax Commissioner can request issue of a production
order in the following circumstances:
• the Commissioner should have reasonable grounds for suspecting
that the information is in the possession or control of the person
such as a bank or financial institution;

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• the information should be relevant to the duties of the


Commissioner with regard to making an assessment in relation to a
taxpayer under any relevant law, making an investigation into any
case involving tax evasion or for the prevention of fraud on the
revenue, determining the tax liability of a taxpayer under a relevant
law; or collecting any outstanding amount owed by a taxpayer on
account of tax, penalty, interest or fine under any relevant law;

• the court can issue production order only in the case of a taxpayer
and the taxpayer in the RAA is defined as – “includes any person
whose liability to make payment of revenue to a revenue
department is in question whether or not, in the event, the payment
is waived or remitted or no amount is found payable”;

• the Court is required to be convinced that a “fishing expedition” is


not being pursued and the taxpayer is not co-operating in providing
the information;

• the information is first to be requested from the taxpayer.

180. The protocol to the Jamaican tax treaty with Spain provides
that the Minister has the power to obtain bank information. Jamaica has
clarified that the requirements of approaching the court before
obtaining the information from the banks also applies to the Minister.
181. Jamaica requires that the requesting state, when seeking bank
information, should normally submit a request letter setting out the
nature and purpose of the request, the name of the taxpayer and any
relevant records on the taxpayer. The Jamaican tax authorities would
then request information from the bank in accordance with domestic
law.
182. The tax authorities can obtain bank information with respect
to persons under examination in Jamaica only and cannot thus request
the bank information if the person is not already under tax examination
in Jamaica, who is the subject of the EOI request. The assessment team
is, therefore, of the view that though the tax treaty with Spain provides
that the Minister has power to obtain bank information, the requisite
information cannot be obtained if the person concerning whom request
is made is not a taxpayer in Jamaica.
183. Information concerning the members of companies and their
holdings is available in the register of members maintained by the
company. These documents are available for inspection during office

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hours to the members and to the public after payment of a fee. The tax
authorities do not have any powers to obtain information about the
identity and ownership of the company directly from the company, if
such a request is not in relation with the assessment of taxpayer (s.75(5)
ITA). The tax authorities can obtain the information about members by
inspecting the register of members as per the procedure outlined in
s.112 of the Companies Act by paying the inspection fee.
184. The judicial procedure prescribed in s.17G of the RAA will
only be available if the requested information is in relation with:
establishing an assessment with respect to a taxpayer under any relevant
law, any case involving tax evasion or for the prevention of fraud on the
revenue, determining the tax liability of a taxpayer under a relevant
law; or collecting any outstanding amount owed by a taxpayer on
account of tax, penalty, interest or fine under any relevant law.
185. The information about the identity of the owners that hold
share warrants cannot be obtained as it is neither available with the
company or the regulatory authorities.
186. Partnerships and trusts are required to file information about
the identity and holding of each partner or beneficiary as the case may
be to the tax authorities in the form of a tax return (Form IT-03). The
tax authorities would be in a position to provide the information
available in the tax returns in response to EOI request. If the
partnerships/trusts have not delivered their tax returns to the tax
authorities then tax authorities would be required to initiate proceedings
specified in ITA s.70 against defaulting partnerships/trusts. As noted
previously, the tax authorities cannot obtain information from the
partnership or trusts, if no tax proceedings are pending in respect of
person for which information is requested. The information about new
trustees can be obtained by the Commissioner from Record Office,
referred to in s.10(6) of the Trustees Act, by using powers contained in
s.70(5) of the ITA.
187. Jamaica has replied that non-charitable trusts are required to
file income tax returns, therefore the information about the settlers,
trustee and beneficiaries are available in the tax returns of such trusts.
The assessment team verified the information available in the tax
form14 and such form does not require providing the information about
the settlors of the trust, though the information on beneficiaries is
available. The charitable trusts file their annual financial statements to
14

http://www.jrs.gov.jm/home_template.php?page=forms&ye=1&desc=Incom
e+Tax.

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the Taxpayer Audit and Assessments Departments. Jamaica has not


furnished the copy of annual financial statements or other documents
with regard to charitable trusts, who are exempt from paying taxes as
well as from filing tax returns, therefore the availability of information
in such could not be verified by the assessment team.
188. Tax authorities dealing with the registration of taxpayers
(s.17D RAA) have information about the taxpayers as is required to be
provided by them and this information can be used to meet the request
received.
189. The non-resident beneficiaries of a trust or the non-resident
partners of a partnership created in Jamaica are assessed to tax through
the representatives of these persons in Jamaica, as per s.53 of the ITA.
In the case of a beneficiary of a trust, the representative is the trustee
(s.55).

Accounting records (ToR B.1.2)


190. Accounting records are maintained by various entities as
required by the legislation regulating those persons and /or required by
the Income Tax Act. Accounting records are not required to be filed
with the government authorities regulating them, except the profit and
loss account and balance sheet in case of companies. The accounting
records cannot be requested for inspection and copies cannot be
obtained by the tax authorities from the person directly maintaining
these records unless there is a request made by the Commissioner to a
person to provide a tax return (s.70 ITA).
191. If a foreign tax authority requests information about business
of its taxpayer with a natural or legal person operating in Jamaica,
which in turn require information from a third person in Jamaica, the
tax authorities would be required to follow the judicial procedure of
RAA s.17G as discussed previously.

Use of information gathering measures absent domestic tax


interest (ToR B.1.3)
192. The tax authorities have information gathering powers for use
when taxpayers are under examination. As mentioned previously, under
the RAA information cannot be obtained from the taxpayer or third
parties in absence of tax proceedings initiated by Jamaica. The powers
under the ITA are less restrictive and allow for requests of information
to taxpayers. Section 83 of the ITA provides for the arrangements with

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the government of territory outside Jamaica with regard to relief from
double taxation. But, due to domestic tax interest requirements it may
not be possible to provide the requested information.
193. 194. The power to obtain information is very limited
because tax authority can only obtain information if the taxpayer is
currently under examination. A jurisdiction should have no restrictions
on information exchange caused by the domestic tax interest
requirement. The TOR (B.1.3) provides that competent authorities
should use all relevant information-gathering measures to obtain the
information requested, notwithstanding that the requested jurisdiction
may not need the information for its own tax purposes (e.g. information
should be obtained whether or not it relates to a taxpayer that is
currently under examination by the requested jurisdiction).
Compulsory powers (ToR B.1.4)
195. As discussed above the powers to obtain information are
limited to information held by the taxpayer if he is under examination
or information already held by government authorities.
196. Under the EOI arrangements, the Contracting State is not
obliged to provide information not obtainable under the domestic laws
or in the normal course of the administration of that or other
Contracting State. The powers of inspection, search and seizure of
documents, though available in Jamaican law, are subject to certain
requirements as provided above, it may therefore be that if these
requirements are not met Jamaica can refuse to resort to such methods
for responding to information requests from the tax authorities of other
countries.
197. The assessment team is of the belief that clear laws or
regulations should be adopted that allow for the Jamaican tax
authorities to have the necessary powers to issue a notice to any person
residing in the territorial jurisdiction of Jamaica, who is suspected to
have information in his possession or control, to produce the
information and give evidence in connection with any proceedings to
comply with its obligations under EOI arrangement. This power to
issue the notice should not be limited by the fact that such person
should be under tax examination. This power may be subject to internal
controls and safeguards to avoid the misuse.

Secrecy provisions (ToR B.1.5)


198. Section 45(1) of the Banking Act contains provisions for
protecting the secrecy or confidentiality of the information held by

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banks. The official or the person, having access to records of the bank
or the material with regard to the account of any customer of the bank,
are prohibited from giving, divulging or revealing such information.
The contravention of the provisions on conviction provides a fine up to
USD 2 000 000 or to imprisonment for a term up to two years or to both
such fine and imprisonment.
199. However, the above stated secrecy rule can be overridden if
one or more of the 13 circumstances described in the Fourth Schedule
of the Banking Act. These include:
• the information is disclosed to an authorised officer (Supervisor,
Deputy Supervisor or any other person authorised to perform
functions on behalf of the Supervisor or the Deputy Supervisor
under Bank of Jamaica Act);

• the disclosure is made on the written direction of the Minister to


the police or to a public officer who is duly authorised under the
provisions of any law for the time being in force which requires
such disclosure for the purpose of the investigation or prosecution
of a criminal offence;

• the Minister in writing directs such disclosure to a foreign


government or agency of such government where there exists
between Jamaica and such foreign government an agreement for
the mutual exchange of information of such kind and the Minister
considers it in the public interest that such disclosure be made;

• the disclosure is required under another enactment;

• the disclosure is required by virtue of an order of the court, other


than an order under paragraph (g). Paragraph (g) provides for the
circumstance, where the bank has been served with a court order
attaching money in the account of the customer.

200. Similar provisions regarding secrecy, exceptions thereof and


contravention amounting to an offence are available in s.44 of the
Financial Institutions Act.
201. Secrecy provisions are also contained in s.34D and s.47 of the
Bank of Jamaica Act. Section 34D(1)(b) requires that an authorised
officer shall not disclose other than for the purpose of the Bank of
Jamaica Act, the Banking Act, or the Financial Institutions Act, any
information regarding the affairs of a customer of a commercial bank or

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specified financial institution, obtained in consequence of the
performance of his duties under the Act. Provisions of s.47 require the
officers and servants and auditors of the bank to preserve and aid in
preserving secrecy. Unauthorised disclosure constitutes an offence.
202. There is no restriction in the company law for providing the
information to the tax authorities. But, s.390 of the Companies Act
provides that a person who has acted as attorney for the defendant
cannot be required to disclose any privileged communication to him in
the capacity of attorney.
203. Section 4 of the ITA requires every person involved in the
administration of the act to deal with all documents, information,
returns, assessment lists and copies of such lists relating to the income
or items of income of any person as secret and confidential. However,
communicating the information or contents of documents for the
purpose of the act and to the person authorised by the Minister is
permitted. Similar secrecy provisions are available in s.17H of the
RAA, s.19A of the Customs Act, s.37 of the Transfer Tax Act, s.8 of
the Asset Tax Act and s.59B of the Securities Act.
204. Section 17H of the RAA, s.62 of the General Consumption
Tax Act and s.59B of the Securities Act has additional provisions of
secrecy applicable to the persons to whom the information is
communicated. They shall regard and deal with such information as
secret and confidential and shall make and subscribe a declaration to
that effect before a Justice of the Peace.
205. The secrecy provisions available under various acts can be
overridden under various circumstances, as in the case of the Banking
Act and Financial Institutions Act discussed above. The information
can be obtained by the Commissioner by obtaining production order.
The tax authorities share information for the purposes of the act. Due to
these specific safeguards inbuilt in the law, the information can be
made available to the tax authorities and a secrecy provision as such
does not act as a barrier to information exchange.
206. Contravention of the secrecy provisions amounts to an
offence under the respective enactments and also under the ITA.
Section 83 of the ITA authorises the Minister to make orders declaring
arrangements to be in force with other territories with a view to
affording relief from double taxation and s.83(4) provides that when
such arrangements have effect, the obligation as to secrecy imposed by
s.4 shall not prevent the disclosure to any authorised officer of the
Government with which arrangements are made, of such information as
is required to be disclosed under the arrangement. Due to these specific

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provisions, the secrecy provisions do not prevent the information


disclosure to the competent authority of treaty partner.
207. Under various Jamaican statutes secrecy provisions are
foreseen and the person dealing with the information in their official
capacity have duty to regard and deal with such information as secret
and confidential. However, such persons are allowed to communicate
the information to:
• the person to whom he is authorised by the Minister to communicate;

• for the purpose of the Act.

208. The secrecy provisions under various enactments are in place


but information may be exchanged between different administrative
authorities, if authorised by the Minister. Jamaica has not clarified the
rules or orders made, if any, by the Minister in this regard.

Determination and factors underlying recommendations


Determination
The element is not in place.
Factors underlying Recommendations
recommendations
The powers of Jamaica’s tax The tax authorities should be
authorities to obtain information granted the power to obtain
for exchange of information from information that is the subject of
the taxpayer or third parties are request under an exchange of
subject to there being a information notwithstanding
domestic tax interest. Jamaica might not need the
information for its own tax
purposes.

B.2. Notification requirements and rights and safeguards

The rights and safeguards (e.g. notification, appeal rights) that apply
to persons in the requested jurisdiction should be compatible with
effective exchange of information.

209. The domestic law does not require that the person who is the
subject of the request be notified that such a request has been made.
Section 17G of the RAA provides that the Judge in Chambers may

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issue production orders after satisfaction that the Tax Commissioner
has requested the information from the taxpayer without success.
Therefore, the taxpayer is notified.
210. The limits on information exchange due to rights and
safeguards are provided in the 2002 OECD Model Agreement on
Exchange of Information on Tax Matters and its commentary and in
Article 26 of the OECD Model Tax Convention on Income and on
Capital and its commentary. The assessment team could find out the
provisions for these rights and safeguards of taxpayers and third parties
in the domestic laws of Jamaica as mentioned below:
• s.45(1) of the Banking Act allows the authorisation by the Minister
to share information with the foreign countries if he is satisfied that
such sharing of information is in public interest; and

• under the judicial procedure mentioned in s.17G of the RAA


persons registered under the Public Accountancy Act are required
to furnish information, documents or records which form part of
taxpayer accounting records only. This indirectly indicates non-
disclosure of the privileged communication between the accountant
and the taxpayer.

211. The Income Tax Act and the Revenue Administration Act do
not provide the safeguards to the taxpayer or third parties with regard
to the following, as the acts do not mention that the Minister will
decline exchange of information where the information is:
• covered by attorney client privilege;

• a trade, business industrial, commercial or professional secret;

• Information the disclosure of which would be contrary to public


policy (ordre public).

212. It is necessary that the laws of Jamaica provide the safeguards


to taxpayers which are guaranteed by the standards of exchange of
information and the competent authority should be in a position to
decline information for the safeguards provided in the EOI mechanisms
of Jamaica Regarding safeguards, Jamaica has clarified that, in seeking
re-dress, the taxpayer may go through the Civil Proceedings in the
Supreme Court where they would apply for Judicial Review. Pursuant
to Part 56.6 of the Civil Procedure Rules, persons who are seeking
Judicial Review must do so promptly and in any event within 3 months
from the date when the grounds for the application first arose. This is

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done in the form of an ex-parte application for leave which is usually


granted. Upon the hearing of the matter, the court can offer several
remedies including quashing the decision of the Tax Authorities. Either
party may then appeal to a higher court. The matter could go all the
way to the Judicial Committee of the Privy Council. There is no
stipulated timeframe for the court to arrive at a decision.
213. The judicial remedy/appeal process is always open to the
taxpayer or any third party who is aggrieved by any action of the
Revenue. This process can take between 6 months to one year or more
depending on how far the appeal is taken.

Not unduly prevent or delay exchange of information (ToR


B.2.1)
214. The protocol to the Jamaica – Spain tax treaty under the
heading ‘possibility of declining a request’ states that, “The rights and
safeguards secured to persons by the laws or administrative practice of
the Contracting State which has been requested to provide the
information under this Article shall not be applied in a manner that
would unduly prevent or delay effective exchange of information”.
There is no such explicit provision in Jamaica’s other treaties.
215. Jamaican authorities have advised that, generally, the
procedure for obtaining a production order from the court for
information from third parties as per s.17G of the RAA is done
expeditiously (usually within a week after requesting order). The order
generally specifies that the third party produce the information within
30 days of receipt of the order (s.17G RAA). The procedure for
obtaining information from the banks and other persons listed in s.17G
of RAA, through the production order of the Court may cause delay in
providing the information to the competent authority of the requesting
state, however, considering the submission of Jamaica about time taken
in the procedure the delay in not material.
216. Jamaica has agreed that, the law does not provide for the
obtaining of information before first requesting it from the taxpayer.
However, in practice, the Taxpayer Audit and Assessment Department,
which has an investigative arm, usually investigates not only taxpayers
but anyone of interest who may be in breach of the tax laws, without
first notifying them.

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Determination and factors underlying recommendations
Determination
The element is in place, but certain aspects of the legal
implementation of the element need improvement.
Factors underlying Recommendations
recommendations
Taxpayers’ rights are It is recommended that certain
protected by the judicial exceptions from prior notification be
procedures for gathering permitted (e.g. in cases in which the
information. To require in all information request is of a very urgent
cases that the taxpayer be nature or the notification is likely to
first approached, and thus undermine the chance of success of
notified, may unduly prevent the investigation conducted by the
or delay the effective requesting jurisdiction).
exchange of information in
urgent cases.

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COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 65

C. Exchanging Information

Overview

217. Jurisdictions generally cannot exchange information for tax


purposes unless they have a legal basis or mechanism for doing so. The
legal authority to exchange information may be derived from bilateral
or multilateral mechanisms (e.g. double tax conventions, tax
information exchange agreements, the Joint Council of Europe/OECD
Convention on Mutual Administrative Assistance in Tax Matters) or
arise from domestic law. Within particular regional groupings
information exchange may take place pursuant to exchange instruments
applicable to that grouping (e.g. within the EU, the directives and
regulations on mutual assistance).
218. Jamaica has a tax treaty network with 21 jurisdictions,
consisting of 11 bilateral tax treaties15 and a multilateral CARICOM
Income Tax Treaty. This multilateral treaty has been signed by Jamaica
and 10 other jurisdictions. All these agreements are in force and provide
for the exchange of information. Jamaica’s agreement with Spain and
its TIEA with the US clearly provide for exchange of information to the
international standard, as they contain EOI articles with language
similar to Article 26 of the OECD Model Tax Convention.

C.1. Exchange-of-information mechanisms

Exchange of information mechanisms should allow for effective


exchange of information.

15
Jamaica also has a tax treaty with Switzerland. However, this treaty does not
have an exchange of information article and is thus not considered in this
analysis.

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66 – COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
Foreseeably relevant standard (ToR C.1.1)
219. Jamaica has bilateral tax treaties with 11 countries namely
Canada, the Peoples Republic of China, Denmark, France, Germany,
Israel, Norway, Spain, Sweden, the United Kingdom and the US.
Jamaica is also a member of the CARICOM Multilateral Tax Treaty,
which is signed by 11 jurisdictions, the other 10 are: Antigua and
Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts and
Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and
Tobago. Jamaica has also signed a tax information exchange agreement
(TIEA) with the USA. All of Jamaica’s treaties and its TIEA are in
force.
220. The agreements with Canada, China, Denmark, France,
Israel, Norway, Sweden, the United Kingdom, the United States and the
CARICOM agreement provide for the exchange of information as is
“necessary” for carrying out the provisions of the convention or of the
domestic laws of the Contracting states concerning the taxes covered by
the agreements. The agreement with Spain uses the word “foreseeably
relevant” in place of “necessary”. The commentary to Article 26 of the
OECD Model Tax Convention, in paragraph 5 refers to this standard of
“foreseeable relevance” and states that the Contracting States may
agree to an alternative formulation of this standard that is consistent
with the scope of the Article (e.g. by replacing ”foreseeably relevant”
with “necessary” or “relevant”). In view of this recognition of term
“necessary”, all the agreements meet the “foreseeably relevant”
standard.
221. One of Jamaica’s agreements - with Germany - provides for
the exchange of information that is ‘necessary’ for carrying out the
provisions of the agreement, but does not specifically provide for the
exchange of information in aid of the administration and enforcement
of domestic laws.
222. Therefore, all but one of Jamaica’s agreements meets the
foreseeably relevant standard.

In respect of all persons (ToR C.1.2)


223. All agreements of Jamaica, except with Germany, either
specifically mention that the exchange of information is not restricted
by Article 1 (Personal Scope) or information is to be exchanged for
carrying out the provisions of the domestic laws. The domestic laws are
applicable to all non-residents also, therefore, it can be stated that even
in absence of reference to Article 1, the information can be exchanged
in respect of all persons. The agreement with Germany, which provides

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for the exchange of information for the carrying out of the provisions of
the agreement, is therefore only applicable provided one of the persons
concerned is resident in one of the Contracting States. Therefore, all
but one of Jamaican agreements allow for exchange of information with
respect to all persons.

Obligation to exchange all types of information (ToR C.1.3)


224. Jamaica’s tax treaty with Spain (the most recent, effective
16.05.2009) includes a paragraph in the exchange of information article
similar to paragraph 5 of Article 26 of the OECD Model Tax
Convention, which reads “In no case the provisions of paragraph 4 be
construed to permit a contracting state to decline to supply information
solely because the information is held by a bank, other financial
institution, nominee or person acting an agency or a fiduciary capacity
or because it relates to ownership interest in a person”. Jamaica’s TIEA
with the USA also provides that the competent authorities of the
Contracting states have authority to obtain and shall provide
information from financial institutions (art.3(2) of the TIEA).
225. Jamaica’s bilateral tax treaties with other countries do not
contain paragraphs similar to paragraphs 4 and 5 of Article 26 of the
OECD Model Tax Convention, but the domestic laws of these treaty
partners do not have any provisions limiting the exchange of
information. Therefore, under these treaties, Jamaica as well as all
treaty partners may be able to exchange all type of information.
226. The CARICOM agreement also does not contain provisions
similar to paragraphs 4 and 5 of OECD Model. It meets the standard
with respect to 3 jurisdictions only: Antigua and Barbuda, Barbados
and Saint Kitts and Nevis for the following reasons:
• the competent authorities of Belize, St. Lucia and St. Vincent and
the Grenadines have access to bank information in criminal tax
matters only;

• Grenada is only able to access information for the purpose of its


TIEA with the USA, therefore, it will not be able to exchange
information in pursuance to CARICOM agreement;

• Dominica has not provided any information regarding powers of


competent authority to access bank information;16

16
See Tax Co-operation 2009 –Towards a Level Playing Field.

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68 – COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
• information about competent authorities’ powers to access bank
information to obtain ownership, identity and accounting
information for the purpose of exchange of information is not
available with respect to Guyana and Trinidad and Tobago, so it is
not possible to confirm that the CARICOM treaty with those
jurisdictions meets the OECD standard;

• Saint Kitts and Nevis has enacted the Saint Christopher and Nevis
(Mutual Exchange of Information on Tax Matters) Act 2009 which
provides that all types of information may be obtained and shared
with treaty partners (civil as well as criminal);

• the competent authorities of Antigua and Barbuda and Barbados


have powers to obtain bank information and access to ownership,
identity and accounting information. Therefore, all types of
information can be exchanged if all other conditions are also
satisfied.

Absence of domestic tax interest (ToR C.1.4)


227. Jamaica’s tax treaty with Spain includes a paragraph in the
exchange of information article similar to paragraph 4 of Article 26 of
the OECD Model Tax Convention, which reads: “If the information is
requested by a Contracting State in accordance with this Article, the
other Contracting State shall use its information gathering measures to
obtain the requested information, even though the other State may not
need such information for its own tax purposes. Accordingly, that other
Contracting State neither shall nor decline to supply information solely
because it has no domestic interest in such information”.
228. The exchange of information agreement with the USA
provides that, if the information available in the tax files of the
requested states is not sufficient to enable compliance with the request,
that State shall take all relevant measures to provide the Applicant State
with the information requested (Art.3(2) TIEA).
229. The bilateral treaties with other countries do not contain
similar language, but the domestic laws of all the treaty partners do not
require the presence of domestic tax interest for the purpose of
exchange of information.
230. However, the powers of Jamaican tax authorities to obtain
information are subject to the procedures provided under domestic law
which require that the taxpayer be under examination. This requirement

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COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 69

amounts to domestic tax interest requirement and Jamaica and on this


finding Jamaica has commented that, “According to the common law
tradition the State (including the Revenue) should not be allowed to go
on a fishing expedition therefore the requirement for the intervention of
the Court is there to ensure that the Revenue has a prima facie case
before it requires information from third parties. Additionally third
parties have their own rules with regard to the disclosure of the
taxpayer information. However the taxpayer is given every opportunity
to produce the information before recourse to the courts.
Notwithstanding this, in realising that the interest of the Revenue has to
be safeguarded and that in order to do so it must go beyond the request
of information from the taxpayer, the Revenue has taken steps by way
of administrative intervention to carry out investigations which it is
hoped will assist in the protection of the Revenue’s interest. The
Revenue is also involved in providing information to the other arms of
State in the interests of National Security.’’

Absence of dual criminality principles (ToR C.1.5)


231. Jamaica’s agreements do not contain any dual criminality
provisions for exchange of information in tax purposes. The protocol to
the Jamaica-Spain treaty provides that information shall be exchanged
without regard to whether conduct being investigated would constitute
a crime under the laws of that contracting state if such conduct occurred
therein. Therefore, there is no restriction to exchange information on
this account.

Exchange of information in both civil and criminal tax matters


(ToR C.1.6)
232. All of Jamaica’s agreements for the exchange of information
provide for exchange of information in both civil and criminal tax
matters.

Provide information in specific form requested (ToR C.1.7)


233. Jamaica’s TIEA with the USA provides that the Competent
Authority of a Contracting State shall provide information, if
specifically requested by the Competent Authority of the other State, in
the form of depositions of witnesses and authenticated copies of
unedited original documents (including books, papers, statements,
records, accounts, or writings), to the same extent such depositions and
documents can be obtained under the laws and administrative practices

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70 – COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
of such State with respect to its own taxes. The protocol to treaty with
Spain also provides that, if specifically requested the contracting state
shall provide information to the extent allowable under its domestic
laws, in the form of depositions of witnesses and authenticated copies
of the original records. Though this provision is not provided in other
tax treaties, there appears to be no restrictions in Jamaica as far as the
same is consistent with its own domestic law and administrative
practices.

In force (ToR C.1.8)


234. All of Jamaica’s signed agreements are in force. In addition,
Jamaica has negotiated a tax treaty with the Netherlands Antilles and
this was initialled on 21 May 2009 in Kingston which contains an
exchange of information provision similar to that concluded with Spain.
Cabinet approval has been received in 2010, but is not yet in force.

Be given effect through domestic law (ToR C.1.9)


235. In order to ratify and therefore give effect to the provisions of
the tax treaty, Cabinet Approval is required. The treaty is accordingly
signed by the Minister of Finance and the contracting parties, and
gazetted. There is no need for approval from Parliament. The treaty is
incorporated into Jamaican laws by Minister of Finance making the
order pursuant to s.83 of the ITA. This order (which includes the actual
treaty) is published by way of Notice in the Gazette that introduces the
treaty into Jamaican Law.
236. Jamaica’s agreement with the Spain requires the exchange of
information regardless of whether Jamaica’s tax authorities require the
information for their own tax purposes. The Jamaican authorities can
obtain information in the cases of continuing tax proceedings only and
may not be able to meet the request in all cases with regard to treaty
with Spain.

Determination and factors underlying recommendations


Determination
The element is not in place
Factors underlying Recommendations
recommendations
Only 1 of Jamaica’s 21 treaties Jamaica should consider both
and its 1 TIEA provide for removing its domestic tax interest

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Determination
effective exchange of and strengthening its international
information to the standard. agreements to meet the
international standard, including by
incorporating text in its exchange of
information articles corresponding
to paragraphs 4 and 5 of Article 26
of the Model Tax Convention.

C.2. Exchange-of-information mechanisms with all relevant


partners

The jurisdictions’ network of information exchange mechanisms should


cover all relevant partners.

237. Jamaica’s agreements are shared with a variety of


jurisdictions, including:
• 5 of its 8 primary main trading partners (United States, Canada, United
Kingdom, France, Trinidad and Tobago; but not the Netherlands,
Trinidad and Tobago, or Russia);

• 20 of the 92 Global Forum member jurisdictions;

• 9 of the 31 OECD member economies;

• 3 of the 19 non-EU G20 members (United States, Canada, and China);

• 8 of the 27 EU members;

• 11 counterparties in North America and the Caribbean, 8 in Europe, 2 in


Asia and one in South America.

238. Jamaica has a fairly good tax treaty network covering its
major trading partners, but not with all the significant economies in its
region with whom it has sizeable business, such as Brazil and
Venezuela. Jamaica is planning to develop an international financial
services centre; therefore, it is necessary to have tax treaties in place
with other major investing economies.
239. No information has been received which would suggest that
Jamaica has not entered into an agreement with any jurisdiction when it
has been requested to do so.

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Determination and factors underlying recommendations
Determination
The element is in place
Factors underlying Recommendations
recommendations
It is recommended that the Jamaican
government continue to conclude
agreements with additional relevant
partners.

C.3. Confidentiality

The jurisdictions’ mechanisms for exchange of information should


have adequate provisions to ensure the confidentiality of information
received.

Information received: disclosure, use, and safeguards (ToR


C.3.1)
240. All of Jamaica’s treaties and its one TIEA contain provisions
for ensuring the confidentiality of the information received. The tax
treaty with Germany (oldest) provides that “any information exchanged
shall be treated as secret and shall not be disclosed to any persons,
authorities or courts other than those concerned with the assessment or
collection of the taxes which are subject of this agreement or
determination of appeals or the prosecution of offence in relation
thereto”.
241. Provisions for keeping the information confidential are also
available in the domestic laws of Jamaica. Section 4 of the Income Tax
Act provides that:
Every person having any official duty or being employed in the
administration of this Act shall regard and deal with all documents,
information, returns, assessment list and copies of such lists relating to
the income or items of the income of any person, as secret and
confidential, and shall make and subscribe a declaration to that effect
before a Justice of the Peace.
Every such person having possession of or control over any
documents, information, returns or assessment lists, or copies of such
lists relating to the income or items of income of any person, who at

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COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 73

any time communicates or attempts such information or anything


contained in such documents, returns, lists or copies to any person-
a) Other than a person to whom he is authorized by the Minister
to communicate it; or
b) Otherwise than for the purpose of the Act, shall be guilty of an
offence against this Act.

242. The standards of confidentiality require that information


received under the exchange of information provisions shall be treated
as secret in the same manner as information obtained under the
domestic laws of that State and shall be disclosed to persons and
authorities (including courts and administrative bodies) concerned with
the assessment or collection of, the enforcement or prosecution in
respect of, the determination of appeals in relation to the taxes or the
oversight of the above. Such persons or authorities shall use the
information only for such purposes. They may disclose the information
in public court proceedings and judicial decisions.
243. As per s.4 of the Income Tax Act, the Minister can authorise
communicating the information to any person. Information obtained
under the exchange of information mechanism should only be used by
the persons authorised to use such information. For maintaining the
confidentiality of the information received from the foreign tax
authorities, it is necessary that the law or rules clearly specify which
authorities can use the information exchanged. There are no legislative
rules governing the exercise of the Minister’s authority to disclose
information to persons in an official capacity. However, in accordance
with hierarchy of Jamaican laws, the provisions of a treaty which has
been enacted into Jamaican law prevail over the provisions in other
laws. Thus, regardless of the Minister’s power to authorise
communication of information to any person, the confidentiality
requirements within the treaties will ensure this does not happen with
respect to international exchange of information.
244. Pursuant to the provisions of the section 17(H)(2)(a) of the
Revenue Administration Act, the Minister may authorise another person
to receive information. In such a case, an instrument is drafted in which
the Minister authorises the tax authority to give information to persons
who are not revenue officers under the act.

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74 – COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
All other information exchanged (ToR C.3.2)
245. The confidentiality provisions in the DTCs and in Jamaica’s
domestic law do not draw a distinction between information received in
response to requests and information forming part of the requests
themselves. As such, these provisions apply equally to all requests for
such information, background documents to such requests, and any
other document reflecting such information, including communications
between the requesting and requested jurisdictions and communications
within the tax authorities of either jurisdiction.

Determination and factors underlying recommendations


Determination
The element is in place

C.4. Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights


and safeguards of taxpayers and third parties.

Exceptions to requirement to provide information (ToR C.4.1)


246. Jamaica has replied that EOI articles in the treaties allow the
non-disclosure in the circumstances specified. The Jamaican tax treaties
have generally provided that the Contracting States are not obliged to
provide information which would disclose any trade, business,
industrial, commercial or professional secret or the information the
disclosure of which would be contrary to public policy.

Determination and factors underlying recommendations


Determination
The element is in place

C.5. Timeliness of responses to requests for information

The jurisdiction should provide information under its network of


agreements in a timely manner.

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COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 75

Responses within 90 days (ToR C.5.1)


247. In order for exchange of information to be effective it needs
to be provided in a timeframe which allows tax authorities to apply the
information to the relevant cases. If a response is provided but only
after a significant lapse of time the information may no longer be of use
to the requesting authorities. This is particularly important in the
context of international cooperation as cases in this area must be of
sufficient importance to warrant making a request. A review of the
practical ability of Jamaica’s tax authorities to respond to requests in a
timely manner will be conducted in the course of Jamaica’s Phase 2
review.

Organisational process and resources (ToR C.5.2)


248. A review of Jamaica’s organisational process and resources
will be conducted in the context of its Phase 2 review.

Absence of restrictive conditions on exchange of information


(ToR C.5.3)
249. There were no aspects of Jamaica’s laws that appeared to
impose restrictive conditions on exchange of information.
Determination and factors underlying recommendations

Determination
The assessment team is not in a position to evaluate whether this
element is in place, as it involves issues of practice that are dealt
with in the Phase 2 review
Factors underlying Recommendations
recommendations
Jamaica should act on the
recommendations noted in respect of
other essential elements to ensure
that information requests can be
responded to in a timely manner.

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SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 77

Summary of Determinations and Factors


Underlying Recommendations
Factors underlying
Determination Recommendations
recommendations
Jurisdictions should ensure that ownership and identity information for all
relevant entities and arrangements is available to their competent authorities.
(ToR A.1)
Information is not required Jamaica should
to be maintained by a establish a
company nor is it otherwise requirement that
available to the competent information is
authority that identifies the maintained
persons in an ownership indicating the
chain where a legal owner person on whose
of a company acts on behalf any legal
behalf of other person as a owner holds his
nominee or under similar interest or shares in
The element is in place,
arrangement. the company or
but certain aspects of
body corporate.
the legal implementation
This could, for
of the element need
example be
improvement
achieved by way of
requirements on
companies and
bodies corporate
themselves, or
alternatively via the
information
submitted to the
Registrar of
Companies.
While share warrants to Jamaica should
bearer areno longer issued take necessary
in Jamaica, there are measures to ensure
insufficient mechanisms in that robust
place that ensure the mechanisms are in
availability of information place to identify the
allowing for identification of owners of share
the owners of previously warrants to bearer.
issued share warrants to
bearer.
Companies incorporated As Jamaica
outside of Jamaica but asserts a sufficient
having their central nexus for taxing
management and control in jurisdiction on a
Jamaica are not required to management and

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78 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

Factors underlying
Determination Recommendations
recommendations
provide information control basis, it
identifying their owners as a should require
part of registration submission of
requirements and foreign information on its
companies are not required owners when
to compulsorily keep a foreign companies
share register in Jamaica. register or when
Therefore, the information they apply for their
that identifies the owners of tax file number and
foreign companies is not Jamaica should
available. take necessary
steps to require
foreign companies
to keep registers of
Jamaican
shareholders in
Jamaica.

Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements. (ToR A.2)
There is no clear Relevant legislation
requirement that relevant for each type of
entities and arrangements entity and
keep underlying arrangement
documentation. should provide for
the obligation to
keep underlying
The element is in place, documentation.
but certain aspects of Jamaica could, for
the legal implementation example, ensure
of the element need the maintaining of
improvement records and
underlying
documents by
prescribing tax
audits of persons
having a turnover
in excess a
threshold amount.
The Jamaican company and The relevant laws
tax laws does not prescribe should be
a compulsory retention amended to
period for records other specify the
than financial institutions retention period of
and other entities regulated at least five years
under anti-money in respect of

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SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 79

Factors underlying
Determination Recommendations
recommendations
laundering legislation. accounting records
for all the entities
Banking information should be available for all account-holders. (ToR A.3)
The element is in place
Competent authorities should have the power to obtain and provide information
that is the subject of a request under an exchange of information arrangement
from any person within their territorial jurisdiction who is in possession or control
of such information (irrespective of any legal obligation on such person to
maintain the secrecy of the information). (Tor B.1)
The powers of Jamaica’s The tax authorities
tax authorities to obtain should be granted
information for exchange of the power to obtain
information from the information that is
taxpayer or third parties are the subject of
subject to there being a request under an
The element is not in
domestic tax interest. exchange of
place
information
notwithstanding
Jamaica might not
need the
information for its
own tax purposes.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons
in the requested jurisdiction should be compatible with effective exchange of
information. (ToR B.2)
Taxpayer’s rights are It is recommended
protected by the judicial that certain
procedures for gathering exceptions from
information. To require in prior notification be
all cases that the taxpayer permitted (e.g. in
be first approached, and cases in which the
The element is in place, thus notified, may unduly information request
but certain aspects of the prevent or delay the is of a very urgent
legal implementation of effective exchange of nature or the
the element need information in urgent notification is likely
improvement. cases. to undermine the
chance of the
success of the
investigation
conducted by the
requesting
jurisdiction).

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80 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

Exchange of information mechanisms should allow for effective exchange of


information. (ToR C.1)
Only1 of Jamaica’s 21 Jamaica should
treaties and its 1 TIEA consider both
provide for effective removing its
exchange of information to domestic tax
the standard. interest and
strengthening its
international
agreements to
meet the
The element is not in international
place standard, including
by incorporating
text in its exchange
of information
articles
corresponding to
paragraphs 4 and
5 of Article 26 of
the Model Tax
Convention.
The jurisdictions’ network of information exchange mechanisms should cover all
relevant partners. (ToR C.2.)
It is recommended
that the Jamaican
government
The element is in place continue to conclude
agreements with
additional relevant
partners.
The jurisdictions’ mechanisms for exchange of information should have
adequate provisions to ensure the confidentiality of information received. (ToR
C.3)
The element is in place
The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties. (ToR C.4)
The element is in place

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SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 81

The jurisdiction should provide information under its network of agreements in a


timely manner. (ToR C.5)
The assessment team is Jamaica should act on
not in a position to the recommendations
evaluate whether this noted in respect of
element is in place, as it other essential
involves issues of elements to ensure
practice that are dealt that information
with in the Phase 2 requests can be
review responded to in a
timely manner.

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ANNEXES – 83

Annex 1: Jurisdiction’s Response to the Review Report*

Jamaica confirms that the captioned report dated 25.6.2010 with


additional changes on 22.7.2010 is an accurate reflection of the laws of
Jamaica.
We wish to indicate that Jamaica will give careful consideration to
the recommendations made. In particular we have already started the
legislative process of amending the Income Tax Act and the Revenue
Administration Act to provide for the removal of domestic interest and
to allow the tax authorities the power to provide information on all
persons whether or not such persons are under a tax examination in
Jamaica. It is anticipated that a Bill will be drafted to facilitate these
amendments by early September 2010. The Parliamentary Process
should begin thereafter.
Please also be advised that the committee which oversees the
reforms of the Companies Act, the Partnership Act and Trust Laws
have also begun their review of the recommendations.
Jamaica would like once again to extend thanks to the Global
Forum and the assessors for this comprehensive assessment of our laws.
Please be assured of our highest regard and commitment to
advancing the work of the Forum.

* This Annex presents the Jurisdiction’s response to the review


report and shall not be deemed to represent the Global
Forum’s views.

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ANNEXES – 85

Annex 2: List of all Exchange-of-Information


Mechanisms in Force
Type of EoI Date Entered
Jurisdiction Date Signed
Arrangement Into Force

1 United Double Taxation 16.03.1973 31.12.1973


Kingdom Convention (DTC)
2 Germany DTC 08.10.1974 13.11.1976
3 Canada DTC 30.03.1978 02.04.1987
4 United States DTC 21.12.1980 29.12.1981
5 Israel DTC 29.06.1984 13.09.1985
6 Sweden DTC 13.03.1985 07.04.1986
7 United States TIEA 18.12.1986 18.12.1986
8 Denmark DTC 16.08.1990 24.10.1991
9 Norway DTC 30.09.1991 02.11.1992
17
10 CARICOM Multilateral 06.07.1994 30.11.1994
11 France DTC 09.08.1995 21.05.1998
12 China DTC 04.07.1996 16.03.1997
13 Spain DTC 08.07.2008 16.05.2009

17
Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts
and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
ANNEXES– 87

Annex 3: List of All Laws, Regulations


and Other Material Received

Commercial Laws
The Companies Act 2004
The Co-operative Societies Act 1950
The Friendly societies Act 1968
The Partnership(Limited) Act 1853
The Trustees Act 1897

Taxation Laws
The Income Tax Act 1955
The Foreign Sales Corporation Act 1984
The Hotel (Incentives) Act 1968
The International Finance Companies(Income Tax Relief) Act 1971
The Revenue Administration Act 1985
The Transfer Tax Act 1971
The Tax collection Act 1867

Banking Laws
The Banking Act 1992
The Bank of Jamaica Act 1960
The Financial Institutions Act 1992

Anti-Money Laundering Act/Regulations


The Proceeds of Crime Act 2007
The Financial Investigation Division Act 2010
The Financial Services Commission Act 2001
The Securities Act 1993
POCA (MLP) Regulations 2007

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88 – ANNEXES
Bank of Jamaica Anti-Money Laundering(AML)/Combating the
Financing of Terrorism(CFT) Policy 1999
Bank of Jamaica – 2004 Guidance Note on the Detection and
Prevention of Money Laundering and Terrorist Financing Activities.

Other
The Building Societies Act 1955
The Insurance Act 2001
The Jamaica Export Free Zones Act 1982
The Legal Profession Act 1972
The Limitation of Actions Act 1881
The Trustees, Attorneys and Executors (Accounts and General) Act
1904
The Public Accountancy Act 1970
The Record Office Act 1879
The Record of Deeds, Wills and Letters Patent Act 1681
The Unit Trusts Act 1971

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ANNEXES– 89

Annex 4: Overview of Commercial Laws and Other


Relevant Factors for Exchange of Information

Relevant Laws
The Revenue Administration Act 1985 (the RAA) deals with the
administration of the revenue department and provides for the creation
of five administrative departments namely; Inland Revenue
Department, Revenue Protection Department, Tax Administration
Services Department and Customs Department. s.9(d) of the Act refers
to safeguarding the interest of Jamaica in the negotiation of
international taxation agreements. The negotiation of international
taxation agreements is the responsibility of the tax administration
services department.
The Income Tax Act 1955 (the ITA) regulates the taxation of
income of residents as well as non-residents in Jamaica. It is
administered by Commissioners appointed under the provisions of the
Revenue Administration Act 1955. Section 83 provides powers to the
Minister to enter into tax treaties. Section 83(4) overrides the secrecy
provisions imposed on the tax authorities by s.4 of the Act and allows
disclosure of information to the authorities of other territories under the
arrangement. It is also provided that the provisions of the arrangement
shall have effect in relation to income tax notwithstanding anything
contained in any enactment.
The Companies Act 2004 repealed and replaced the previous
Companies Act. It empowers the Government to regulate all company
matters including formation, capital, functioning, audit, supervision,
returns, mergers, takeovers and liquidation of companies.
The Partnership (Limited) Act 1853 deals with the law relating to
limited partnerships, i.e. partnerships where one or more partners have
unlimited liability for partnership debts ("general partners"), and one or
more partners have liability for those debts only up to the amount of
capital they have subscribed ("special partners"). Limited partnerships

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
90 – ANNEXES
are not allowed to carry on banking or insurance businesses. Jamaica
has no statute law on ordinary partnerships, i.e. partnerships in which
all the partners have unlimited liability for the partnership's debts.
Ordinary partnerships are governed by the common law of England
which Jamaica inherited, and by the partnership agreement. A
partnership may not have more than 20 members.
The Registration of Business Names Act 1934 – This Act makes it
compulsory for every person to register the business name with the
Registrar of Companies of Jamaica.
The Trustees Act 1897 provides for the, various powers and duties
of trustees, power of the courts etc. Under this Act ” “trust” does not
include the duties incident to an estate conveyed by way of mortgage;
but with this exception the expressions ‘‘trust’’ and “trustee” include
implied and constructive trusts, and cases where the trustee has a
beneficial interest in the trust property, and the duties incident to the
office of personal representative of a deceased person.
The Securities Act 1993 governs the law relating to the business in
securities including mutual funds. It provides for the creation of
commission which is responsible for the general administration of the
Act. It also provides for the creation and regulation of the central
security depositories.
The Proceeds of Crime Act 2007 (POCA) consolidated all
Jamaican legislation with respect to matters related to money
laundering and forfeiture. POCA permits any crime to constitute a
predicate offence for money laundering. Section 92 provides that
money laundering is an act comprising dealings of any kind with
criminal property. Both criminal property and criminal conduct are
defined by the POCA.

Government authorities
The Ministry of Finance and the Public Service (MOFPS)18 has
overall responsibility for the Government’s fiscal and economic policy
framework and collecting and allocating public revenues. The MOFPS
is responsible for the effective regulation of the country’s financial
institutions and its 14 divisions including financial regulation, corporate
services, taxation policy, financial investigations and revenue
protection.

18
http://www.mof.gov.jm.

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ANNEXES– 91

The Revenue Board, created by the Revenue Board Act 1981,


advises the Minister of Finance on revenue matters. A major
responsibility of the Board is the direction, coordination, inspection and
monitoring of the functions of the Tax Commissioners. Other
responsibilities are ensuring an effective and efficient revenue
collection system. "Revenue" includes all taxes, levies, duties, fees, etc.
imposed by law, and certain other non-tax sources. Tax compliance is a
responsibility of the Board.
Tax Administration19 - Jamaica's Tax Administration underwent a
major restructure under the Tax Administration Reform Project in 1999
and 6 tax departments were created:
• Director General's Executive Office - The Director General, Tax
Administration, oversees and guides the operations of the Jamaica
Tax Administration;

• Inland Revenue Department – It has full responsibility for all


compliance, tax collections & taxpayer service functions;

• Jamaica Customs Department has responsibility to collect


revenue, facilitate trade and protect the borders of the country;

• Tax Administration Services Department provides the following


centralised services for the tax departments;

• Taxpayer Appeals Department is responsible for processing


appeals to decisions made by tax commissioners. They also have
responsibility to process waiver applications ;

• Taxpayer Audit and Assessments Department brings together the


audit & assessment functions of the former Income Tax, General
Consumption Tax, Stamp Duty & Tax Departments and the
Revenue Board.

The Bank of Jamaica20 (BOJ) was created by the Bank of Jamaica


Act 1960 and is the Central Bank of Jamaica. The BOJ supervises
banks, merchant banks, building societies, Cambios, bureaux de change
and remittance companies and agencies and has comprehensive powers
of enforcement and sanctions. It ensures that institutions within the
19
.http://www.jamaicatax.gov.jm.
20
http://www.boj.org.jm/bank_home.php.

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92 – ANNEXES
financial sector comply with anti-money laundering and counter-
terrorist financing provisions (AML/CFT) and has issued the
AML/CFT guidance note and FSC guideline for implementing the
provisions of the POCA. The BOJ has supervisory oversight over
institutions governed by the following pieces of legislation:
• Commercial Banks which are governed by the Banking Act;

• Near bank deposit-taking intermediaries, such as merchant banks,


trust companies and finance houses licensed under the Financial
Institutions Act;

• Building Societies / Institutions operating under The Industrial and


Provident Societies Act which either take deposits and/or make
loans.

These statutes provide the legal and policy parameters for the
licensing and supervision of financial institutions. The primary
legislation consists of the Bank of Jamaica Act 1960, the Banking Act
1992, and the Financial Institution Act 1992 and the Building Societies
Act 1897.
The Ministry of Industry, Investment and Commerce21 – This
ministry is responsible amongst other things, for the Companies Act
and Registration of Business Names Act, which are important for the
purpose of this report. It is also the administrative and supervisory
ministry for the company’s office of Jamaica, registrar of co-operative
and friendly societies and the Jamaica Free Zones.
The Financial Services Commission (FSC) was established in
August 2001 under the Financial Services Commission Act. It is the
integrated regulator of financial services in Jamaica and administers the
Insurance Act, Securities Act, Unit Trusts Act and Pensions
(Superannuation Funds and Retirement Schemes) Act.
The Registrar of Companies - Jamaica has a centralised registry
of companies, the Registrar of Companies. The Office of the Registrar
of Companies is part of the Ministry of Industry, Commerce &
Technology. (Jamaica may clarify what is the correct name of this
ministry, as website sows both names). The registrar of companies
registers local and overseas companies, industrial and provident
societies and individuals carrying on business in Jamaica. The registrar
of companies maintains a website22on which the subscribers may view
21
http://www.jis.gov.jm/commerce_science/index.asp.
22
http://www.orcjamaica.com/profile.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
ANNEXES– 93

company documents, business names registration, company names


registration, particulars of directors, change of directors and registered
offices notices.
The Financial Investigation Division23- This Division within the
Ministry of Finance and the Public Service was established in
December 2002. It focuses on the need to deter the use of Jamaica’s
economy for money laundering and other financial crimes thereby
contributing to a stable financial sector and an investor friendly
environment.
The CFATF concluded the third round mutual evaluation of
Jamaica in October 2005. In this evaluation Jamaica was rated partially
compliant or non-compliant with 18 Recommendations. The CFATF
follow- up report of March 2009 states that, any dealing which permits
a person to benefit from the act of tax evasion would under POCA
constitute money laundering offence. The findings of the CFATF
relevant to the issue of exchange of information for tax purpose are
listed below:
• Regulations 6 of The POCA (MLP) Regulations, 2007 specifically
prohibits financial institutions from maintaining anonymous,
fictitious or numbered accounts. Paragraph 93 of the BOJ
(AML/CFT) Guidance note also deals with this issue;

• Regulations 11,12 and 13 of the POCA (MLP) Regulations


requires procedures to be in place to ensure that the identities of
both principals and agents are obtained, and the authorisations of
agents are obtained in the case of transactions are conducted by a
person on behalf of another;

• Regulation 13© of the POCA (MLP) Regulation , 2007 stipulates


that satisfactory measures should be in place to know the identity
of the settler, legal owner or other person who exercises effective
control of the legal arrangement as the case may require, or the
beneficial owner is established, in the cases of any transaction
involving any settlements, trusts or other types of legal
arrangements;

• Regulation 7(1) of the POCA (MLP) Regulations prohibits the


continuation of the business relationship unless customer
information is updated at least once every five years;

23
http://www.mof.gov.jm/fid.

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94 – ANNEXES
• Regulation 7(2) of the POCA(MLP) Regulations require customer
due diligence measures comprising transaction verification
procedures to be applied particularly in the circumstances specified
in regulation 7(3) which include where there is a doubt about the
accuracy of any previously obtained evidence of identity. The
continuity of business relationship is prohibited if this requirement
cannot be fulfilled by the financial institution.

Record keeping
• Regulation 14 of POCA (MLP) Regulations, 2007 mandate the
retention of both identification records and transaction records by
financial institutions for the prescribed period of 5 years
commencing from the date on which the relevant financial
business was completed or the business relationship terminated
whichever is later.

• Paragraph 46 of the BOJ AML/CFT Guidance Note also requires


financial institutions to ensure that the due diligence checks and
reviews and investigations are available to the competent authority
and designated authority.

Overview of the financial sector and relevant professions


The financial services industry in Jamaica consists of commercial
banks, merchant and trust banks, credit unions, building societies and
other licensees under the Financial Institutions Act. The Ministry of
Finance and Planning is responsible for the policy, licensing and
regulation of deposit taking institutions under Banking Act, Financial
Institutions Act and Building Societies Act.
At the end of December 2008, there were 14 supervised deposit-
taking institutions (excluding credit unions), consisting of seven
commercial banks, three merchant banks (FIA licensees), and four
building societies. The BOJ also has supervisory and licensing authority
over Cambios (foreign exchange Traders) and bureaux de change. The
number of approved cambio locations is 153 operated by 70 entities.
The foreign banks have substantial presence in the commercial and
merchant banking business.
The Financial Service Commission is currently responsible for
supervising and monitoring a total of 1,980 licensees and registrants as
well as 522 pensions’ funds and retirement schemes. The FSC, like the

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ANNEXES– 95

BOJ has comprehensive powers of enforcement and sanctions and


conducts examinations of and obtain information from its licensed
institutions. The number of companies licensed to carry various
businesses is: Securities dealer/investment advisors (individuals -eight
and companies 49), Licensed insurance companies (Life- 4 and
General-12), Licensed pension plan administrators -22.
Jamaica liberalised its foreign exchange market by eliminating
capital controls and the limits on access to foreign exchange by local
residents in 1991 on repealing the foreign exchange control Act 1954.
The exporters and other foreign exchange earners are allowed to hold
local
and foreign currency accounts for all payments. Foreign currency is
allowed to be exchanged through licensed authorised dealers only. No
approval is required for repatriation of profits and dividends.
Agreements involving the payment of technical assistance fees,
royalties, management fees, and trademark and patent fees must reflect
arm's-length consideration for tax deduction to be available.
The Jamaica Stock Exchange24 was incorporated as a private
limited company in August 1968. The Exchange trades in securities,
ordinary/common, preference and corporate bonds. Government bonds
are traded in the Bank of Jamaica regulated over the counter market,
principally by stockbroker members and are not listed on the Exchange.
Stock broking is restricted to broker members who trade both as agents
and as principals. Currently, over 50 companies are listed on the
Jamaica Stock Exchange. The stock exchange has eleven listed stock
brokers. The Jamaica Stock Exchange also has detailed rules relating to
the submission of information by companies listed on the Exchange,
including quarterly and annual reports and financial statements. These
documents are publicly available from the Exchange or its website.
The legal and accountancy professions are well regulated in
Jamaica. The attorneys-at –law operate under the Legal Profession Act
1972, and the Canons of Professional Conduct and Etiquette of the
General Legal Council. They are required to register with the Registrar
of Supreme Court of Jamaica as per the Legal Profession Act 1972. The
non-compliance with the standards of conduct can result in suspension
or revocation of the right to practice. The Legal Profession (Accounts
and records) Regulations 1999 requires submission of annual accounts
by members. The accountancy profession operates under a code of
ethics issued by the Institute of Chartered Accountants of Jamaica,
regulated by the Public Accountancy Act 1970. The law requires the
24
http://www.jamstockex.com/index.php.

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96 – ANNEXES
registration by all public accountants providing services in Jamaica.
The Jamaica has another Institute of Chartered Secretaries and
Administrators, whose members provide services relating to company
formation. Real estate dealers are governed by the requirements of the
Real Estate Dealers and Developers Act, which are enforced by the
Real Estate Board.

PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
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(23 2010 27 1 P) ISBN 978-92-64-09555-7 – No. 57653 2010
Global Forum on Transparency and Exchange of Information
for Tax Purposes

PEER REVIEWS, PHASE 1: JAMAICA


The Global Forum on Transparency and Exchange of Information for Tax Purposes is
the multilateral framework within which work in the area of tax transparency and exchange
of information is carried out by over 90 jurisdictions which participate in the work of the
Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the
implementation of the standards of transparency and exchange of information for tax
purposes. These standards are primarily reflected in the 2002 OECD Model Agreement
on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commentary as updated
in 2004, which has been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information
must be provided, including bank information and information held by fiduciaries,
regardless of the existence of a domestic tax interest or the application of a dual
criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum
as relevant to its work, are being reviewed. This process is undertaken in two phases.
Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for
the exchange of information, while Phase 2 reviews look at the practical implementation
of that framework. Some Global Forum members are undergoing combined – Phase 1
plus Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement
the international standards of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus
represent agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency.

Please cite this publication as:


OECD (2010), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
Reviews: Jamaica 2010: Phase 1, Global Forum on Transparency and Exchange
of Information for Tax Purposes: Peer Reviews, OECD Publishing.
http://dx.doi.org/10.1787/9789264095564-en
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical
databases. Visit www.oecd-ilibrary.org, and do not hesitate to contact us for more information.

ISBN 978-92-64-09555-7

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