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AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LATVIA AND THE STATES OF GUERNSEY FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS
WHEREAS the Government of the Republic of Latvia and the States of Guernsey have long been active in international efforts in the fight against financial and other crimes, including the targeting of terrorist financing;
WHEREAS it is acknowledged that the States of Guernsey has the right, under the terms of the Entrustment from the United Kingdom of Great Britain and Northern Ireland, to negotiate, conclude, perform and subject to the terms of this Agreement terminate a tax information exchange agreement with the Government of the Republic of Latvia;
WHEREAS the States of Guernsey on the 21st February 2002 entered into a political commitment to the OECD's principles of effective exchange of information;
WHEREAS the Parties wish to enhance and facilitate the terms and conditions governing the exchange of information relating to taxes;
NOW, therefore, the Parties have agreed to conclude the following Agreement which contains obligations on the part of the Parties only:
Article 1
Scope of the Agreement
The competent authorities of the Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Parties concerning the taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation of tax matters or prosecution of criminal tax matters. A requested Party is not obliged to provide information which is neither held by its authorities, nor in the possession of or obtainable by persons who are within its territorial jurisdiction. The rights and safeguards secured to persons by the laws or administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.
Article 2
Taxes Covered
1. This Agreement shall apply to the following taxes imposed by the Parties:
(a) in the case of Guernsey:
(i) income tax;
(ii) dwellings profits tax;
(b) in the case of Latvia:
(i) the enterprise income tax (uznemumu ienakuma nodoklis);
(ii) the micro-enterprise tax (mikrouznemumu nodoklis);
(iii) the personal income tax (iedzivotaju ienakuma nodoklis);
(iv) the immovable property tax (nekustama ipasuma nodoklis);
(v) the value added tax (pievienotas vertibas nodoklis).
2. This Agreement shall apply also to any identical taxes imposed after the date of signature of the Agreement in addition to or in place of the existing taxes, or any substantially similar taxes if the Parties so agree. Furthermore, the taxes covered may be expanded or modified by mutual agreement of the Parties in the form of an exchange of notes. The competent authority of each Party shall notify the other of substantial changes in laws which may affect the obligations of that Party pursuant to this Agreement.
Article 3
Definitions
1. In this Agreement:
(a) "Guernsey" means the States of Guernsey, and when used in a geographical sense means Guernsey, Alderney and Herm, including the territorial sea adjacent to those islands, in accordance with international law;
(b) "Latvia" means the Republic of Latvia and, when used in the geographical sense, means the territory of the Republic of Latvia and any other area adjacent to the territorial waters of the Republic of Latvia within which under the laws of Latvia and, in accordance with international law, the rights of Latvia may be exercised with respect to the sea bed and its sub-soil and their natural resources;
(c) "collective investment fund or scheme" means any pooled investment vehicle, irrespective of legal form. The term "public collective investment fund or scheme" means any collective investment fund or scheme provided the units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed by the public. Units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed "by the public" if the purchase, sale or redemption is not implicitly or explicitly restricted to a limited group of investors;
(d) "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;
(e) "competent authority" means:
(i) in the case of Guernsey, the Director of Income Tax or his delegate;
(ii) in the case of Latvia, the State Revenue Service or its authorised representative except that, where Latvia is the requesting Party, the Prosecutor General or its authorised representative may act as the competent authority in respect of criminal tax matters;
(f) "criminal laws" means all criminal laws designated as such under domestic law, irrespective of whether such are contained in the tax laws, the criminal code or other statutes;
(g) "criminal tax matters" means tax matters involving intentional conduct whether before or after the entry into force of this Agreement which is liable to prosecution under the criminal laws of the requesting Party;
(h) "information" means any fact, statement, document or record in whatever form;
(i) "information gathering measures" means laws and administrative or judicial procedures enabling a requested Party to obtain and provide the information requested;
(j) "Parties" means:
(i) Guernsey; and
(ii) Latvia;
(k) "person" includes an individual, a company and any other body of persons;
(l) "principal class of shares" means the class or classes of shares representing a majority of the voting power and value of the company;
(m) "publicly traded company" means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold "by the public" if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of investors;
(n) "recognised stock exchange" means any stock exchange agreed upon by the competent authorities of the Parties;
(o) "requested Party" means the Party to this Agreement which is requested to provide or has provided information or assistance in response to a request information;
(p) "requesting Party" means the Party to this Agreement submitting a request for or having received information or assistance from the requested Party;
(q) "tax" means any tax covered by this Agreement.
2. As regards the application of this Agreement at any time by a Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the laws of that Party, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.
Article 4
Exchange of Information Upon Request
1. The competent authority of the requested Party shall provide upon request by the requesting Party information for the purposes referred to in Article 1. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or the conduct being investigated would constitute a crime under the laws of the requested Party if it had occurred in the territory of the requested Party. The competent authority of the requesting Party shall only make a request for information pursuant to this Article when it is unable to obtain the requested information by other means within its own territory, except where recourse to such means would give rise to disproportionate difficulty.
2. If the information in the possession of the competent authority of the requested Party is not sufficient to enable it to comply with the request for information, the requested Party shall use at its own discretion all relevant information gathering measures necessary to provide the requesting Party with the information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.
3. If specifically requested by the competent authority of the requesting Party, the competent authority of the requested Party shall provide information under this Article, to the extent allowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original records.
4. Each Party shall ensure that its competent authorities, for the purposes specified in Article 1 of the Agreement, have the authority to obtain and provide upon request:
(a) information held by banks, other financial institutions, and any person acting in an agency or fiduciary capacity including nominees and trustees;
(b) (i) information regarding the beneficial ownership of companies, partnerships, foundations, and other persons, including, ownership information on all such persons in an ownership chain;
(ii) in the case of collective investment funds or schemes, information on shares, units and other interests;
(iii) in the case of trusts, information on settlors, trustees, protectors, enforcers and beneficiaries;
(iv) in the case of foundations, information on founders, members of the foundation council and beneficiaries.
This Agreement does not create an obligation for a Party to obtain or provide ownership information with respect to publicly traded companies or public collective investment funds or schemes, unless such information can be obtained without giving rise to disproportionate difficulties.
5. Any request for information shall be formulated with the greatest detail possible and shall specify in writing:
(a) the identity of the person under examination or investigation;
(b) the period for which the information is requested;
(c) the nature of the information requested and the form in which the requesting Party would prefer to receive it;
(d) the tax purpose for which the information is sought;
(e) the reasons for believing that the information requested is foreseeably relevant to tax administration and enforcement of the requesting Party, with respect to the person identified in subparagraph (a) of this paragraph;
(f) the grounds for believing that the information requested is present or held in the requested Party or is in the possession of, under the control of or obtainable by a person within the jurisdiction of the requested Party;
(g) to the extent known, the name and address of any person believed to be in possession of, in the control of or able to obtain the information requested;
(h) a statement that the request is in conformity with the laws and administrative practices of the requesting Party, that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement;
(i) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except where that would give rise to disproportionate difficulty.
6. The competent authority of the requested Party shall forward the requested information as promptly as possible to the requesting Party. To ensure a prompt response, the competent authority of the requested Party shall:
(a) confirm receipt of a request in writing to the competent authority of the requesting Party and shall notify the competent authority of the requesting Party of deficiencies in the request, if any, within 60 days of the receipt of the request;
(b) if the competent authority of the requested Party has been unable to obtain and provide the information within 90 days of receipt of the complete request, including if it encounters obstacles in furnishing the information or it refuses to furnish the information it shall immediately inform the competent authority of the requesting Party, explaining the reason for its inability, the nature of the obstacles or the reasons for its refusal.
Article 5
Tax Examinations Abroad
1. At the request of the competent authority of the requesting Party, the competent authority of the requested Party may allow representatives of the competent authority of the requesting Party to enter its territory to interview individuals and examine records with the prior written consent of the persons concerned. The competent authority of the requesting Party shall notify the competent authority of the requested Party of the time and place of the intended meeting.
2. At the request of the competent authority of the requesting Party, the competent authority of the requested Party may permit representatives of the competent authority of the requesting Party to attend a tax examination in the territory of the requested Party.
3. If the request referred to in paragraph 2 of this Article is granted, the competent authority of the requested Party conducting the examination shall, as soon as possible, notify the competent authority of the requesting Party of the time and place of the examination, the authority or official designated to carry out the examination and the procedures and conditions required by the requested Party for the conduct of the examination. All decisions regarding the conduct of the examination shall be made by the requested Party conducting the examination.
Article 6
Possibility of Declining a Request
1. The competent authority of the requested Party may decline to assist:
(a) where the request is not made in conformity with this Agreement;
(b) where the requesting Party has not pursued all means available in its own territory to obtain the information, except where recourse to such means would give rise to disproportionate difficulty; or
(c) where the disclosure of the information requested would be contrary to public policy.
2. This Agreement shall not impose upon a requested Party any obligation to provide items subject to legal privilege, or supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, provided that information described in Article 4, paragraph 4, shall not by reason of that fact alone be treated as such a secret or trade process.
3. A request for information shall not be refused on the ground that the tax claim giving rise to the request is disputed.
4. The requested Party shall not be required to obtain and provide information which, if the requested information was within the jurisdiction of the requesting Party, the competent authority of the requesting Party would not be able to obtain under its laws or in the normal course of administrative practice.
5. The requested Party may decline a request for information if the information is requested by the requesting Party to administer or enforce a provision of the tax law of the requesting Party, or any requirement connected therewith, which discriminates against a national or citizen of the requested Party as compared with a national or citizen of the requesting Party in the same circumstances.
Article 7
Confidentiality
1. All information received by the competent authority of a Party shall be treated as confidential in the same manner as information obtained under the domestic laws of that Party.
2. Such information shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the purposes specified in Article 1, and used by such persons or authorities only for such purposes, including the determination of any appeal. For these purposes, information may be disclosed in public court proceedings or in judicial decisions.
3. Such information may not be used for any purpose other than for the purposes stated in Article 1 without the express written consent of the competent authority of the requested Party.
4. Information provided to a requesting Party under this Agreement may not be disclosed to any other jurisdiction.
Article 8
Costs
Unless the competent authorities of the Parties otherwise agree, indirect costs incurred in providing assistance shall be borne by the requested Party, and direct costs incurred in providing assistance (including costs of engaging external advisors in connection with litigation or otherwise) shall be borne by the requesting Party. The respective competent authorities shall consult from time to time with regard to this Article, and in particular the competent authority of the requested Party shall consult with the competent authority of the requesting Party in advance if the costs of providing information with respect to a specific request are expected to be significant.
Article 9
Language
Requests for assistance and responses thereto shall be drawn up in English.
Article 10
Mutual Agreement Procedures
1. Where difficulties or doubts arise between the Parties regarding the implementation or interpretation of this Agreement, the respective competent authorities shall use their best efforts to resolve the matter by mutual agreement.
2. In addition to the agreements referred to in paragraph 1 of this Article, the competent authorities of the Parties may mutually agree on the procedures to be used under Articles 4, 5 and 8.
3. The Parties may also agree on other forms of dispute resolution should this become necessary.
Article 11
Mutual Assistance Procedure
If both competent authorities of the Parties consider it appropriate to do so they may agree to exchange technical know-how, develop new audit techniques, identify new areas of non-compliance, and jointly study non-compliance areas.
Article 12
Entry into Force
This Agreement shall enter into force 30 days after receipt of written notification by the latter Party of completion of all legal formalities required for entry into force. Upon the date of entry into force, it shall have effect:
(a) for criminal tax matters on that date; and
(b) for all other matters covered in Article 1 on that date, but only in respect of taxable periods beginning on or after that date or, where there is no taxable period, all charges to tax arising on or after that date.
Article 13
Termination
1. Either Party may terminate this Agreement by giving notice of termination in writing. Such termination shall become effective on the first day of the month following the expiration of a period of 3 months after the date of receipt of notice of termination by the other Party. All requests received up to the effective date of termination will be dealt with in accordance with the terms of this Agreement.
2. If the Agreement is terminated the Parties shall remain bound by the provisions of Article 7 with respect to any information obtained under this Agreement.
IN WITNESS WHEREOF the undersigned have signed the Agreement.
DONE at London in duplicate this 5th day of September 2012, in the English language.
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For the Government of the
Republic of Latvia |
For the States of
Guernsey |
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