IoM Publishes Guidance On Savings Tax Disclosure

by Amanda Banks, Tax-News.com, London

24 February 2011

The Income Tax Division of the Isle of Man Treasury has published guidance on the application of the European Savings Directive, and the Isle of Man's shift to automatic exchange of tax information from July 1, 2011.

The government announced last year that the Isle of Man would make mandatory the automatic exchange of information from July 2011. Practice Note 168/11, released alongside the guidance, covers in depth the reporting requirements that will be required from this date, aimed at those that are considered paying agents within the Isle of Man who have responsibility for reporting information regarding interest payments made to beneficial owners resident in an EU member state.

Paying agents will be required to submit the information to be exchanged as an XML file compatible with the standard format for the exchange of information used within the EU (FISC 153). This will be the prescribed form for the purposes of the Order.

An alternative format will be allowed for paying agents disclosing less than ten items of data that fall subject to be disclosed. These paying agents can apply to the Assessor in writing for permission to use an MS Excel format as an alternative to FISC 153. Applications to use the alternative format should be submitted before the end of the relevant tax year.

Although the Assessor does not currently prescribe a form to be used for the reporting under section 78, Income Tax Act 1970, of interest paid to Isle of Man residents, consideration is being given to requiring the use of FISC 153 for this purpose.

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