Guernsey Witholding Tax Decision Will Not Influence IoM Says Bell

by Jason Gorringe, Tax-News.com, London

09 April 2003

Isle of Man Treasury Minister Alan Bell has indicated that Guernsey's decision to opt for the withholding tax over exchange of information is somewhat of a surprise, though not entirely unexpected, and won't influence the Island's decision on the issue.

It was the timing of the Guernsey Advisory and Finance Committee's decision which was the most surprising thing according to Bell, given that the actual European Savings and Tax Directive has not yet been formally concluded. Speculation suggests that Guernsey hurried its decision somewhat to calm an increasingly anxious banking sector, and it is thought this will instil more certainty in the financial community.

The Isle of Man has yet to decide which option to take, and Bell says that the jurisdiction will make an entirely objective decision and won't be influenced by events in Guernsey.

"This is a big issue for our economy and arriving at the right decision is more important than making an early one," the Treasury Minister affirmed.

The withholding tax is aimed at EU citizens only, and does not apply to companies or trusts. The next Ecofin (European Council of Finance Ministers) takes place on May 13, and as yet not all 15 states are in complete agreement over the Directive. This has pushed the likely implementation date back one year to 2005.

Meanwhile, the IOM Treasury will continue its extensive consultation process with the finance industry.

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