Tax Information Exchange Agreements Put To The Test

The recent case of Volaw Trust & Corporate Services Limited and Larsen v Comptroller of Taxes [2013] JRC 095 is the first case to decide on an appeal against a notice issued by the Comptroller of Income Tax under the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 (the "Regulations").

The notice was served against the backdrop of the Tax Information Exchange Agreement ("TIEA") between Jersey and Norway which had come into force on 7 October 2009.  The notice sought the production of specified documents in relation to the Norwegian tax affairs of Mr Larsen as held by a third party, Volaw Trust & Corporate Services Limited.

The Regulations give the Comptroller power to require production of tax information from third parties when he has "reasonable grounds for believing ... (a) that a tax payer may have failed to comply ... with a domestic law of a third country concerning tax; and (b) that any such failure has led, or is likely to