Isle Of Man: Council Of Ministers Proposes OECD Commitments
Last week Tax-news.com
reported that the Isle of Man was told by OECD Deputy Secretary
General Seiichi Kondo that it must make more changes to its tax
regime before it can satisfy the OECD and be removed from the
organisation's blacklist of un-cooperative tax havens. He had
praised the Isle of Man, saying the island had done well, but
the regulations governing transparency, exempt companies and the
exchange of information were issues that had yet to be dealt with.
Now the Manx government has come up with a proposed schedule of
OECD commitments aimed at ensuring the Paris-based organisation
does not include the Isle of Man on its revised list of tax havens,
due to be published in July 2001. By July next year,
jurisdictions targeted by the OECD will have had twelve months
in which to get their houses in order, or at least to the liking
of the OECD. The Council of Ministers' advance commitments will
be made to the OECD if they are approved by the island's parliament,
Tynwald, at its December sitting. If accepted by the OECD, they
will remove the threat of economic sanctions and, says the goverment,
form the basis for further detailed negotiation. The commitments deal
with the precise "deficiencies" noted by the OECD Deputy
Secretary General. They cover exchange of information with other
tax authorities (instead of the introduction of banking secrecy
laws), transparency and preferential tax regimes, and are in line
with the Treasury tax strategy approved by Tynwald in October
this year. The changes will ensure information on the beneficial
ownership of companies is available to regulatory authorities;
international companies in their current form, non-resident companies
and share warrants to the bearer will be abolished, and restrictions
on the ability of Isle of Man entities to do business on preferential
tax terms will be removed. Changes would be phased over the next
five years. The Council of Ministers
has stressed that its offer to make changes must be counter-balanced
by guarantees from the OECD that the Isle of Man will not make
next year's blacklist and that sufficient equivalent commitments
are made by other jurisdictions including OECD members. The Manx government
has been negotiating with the OECD since the organisation published
its provisional list of 35 so-called "harmful" tax havens
' in June 2000. Representatives of the Isle of Man's financial
services sector, consulted by the government, have been unanimous
in their desire to see the UK dependency excluded from the final
tally. Hence the commitments of last week, which Chief Minister
Donald Gelling categorically denies signify the Manx government
giving in to external pressure. Mr Gelling said a working party
with the financial sector has been created to discuss alternative
vehicles to exempt companies and the impact of the commitments
in the Isle of Man. .
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