Mr Bell was commenting following completion of formal directive procedures with 24 of the EU’s 25 Member States, including the Minister’s signing of 126 bilateral savings tax agreements in all relevant languages.

The outstanding agreement, with Spain, will be signed once internal arrangements in that country are completed.

In addition to the Isle of Man, three EU member states (Austria, Belgium and Luxembourg), Switzerland, Liechtenstein, Andorra and the Channel Islands will introduce a withholding tax in respect of interest payments to EU resident individuals. Under the agreement, investors retain the right to opt for disclosure of information with their home tax authority should they wish.

The rate of tax to be applied to interest payments will be 15%. After three years this will increase to 20% and finally after a further three years it will increase to 35%.

“The economic well-being of our Island is best served by adopting a retention tax on the same terms as Austria, Belgium and Luxembourg,” observed Mr Bell, adding: “It provides for a flexible approach by the investor and allows time for the debate to mature on the standard of information exchange to be adopted by all countries.”

The text of the Agreements follows that of the EU Directive in large part but with appropriate adaptations and the inclusion of additional safeguards in the provisions in the Agreements for their suspension or termination if certain events come to pass.

According to the Manx government, these safeguards are fundamental to any agreement entered into by the Isle of Man, and reinforce the underlying requirement of fairness and equality of treatment.