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Isle Of Man Discusses Automatic Information Exchange

by Jason Gorringe, Tax-News.com, London

21 February 2013


The Isle of Man's Treasury Minister Eddie Teare has discussed progress towards sharing tax data on an automatic basis with the United States following the announcement on February 19, 2013, that British and Manx authorities had agreed to enhance cooperation in this area.

On February 19, 2013, the UK Government confirmed that it had initialed an agreement with the Isle of Man Government that would facilitate information sharing on an automatic basis between the two territories' tax authorities. The agreement, released on February 20, 2013 by the Manx Government, sets out the regime for information sharing, and provides for an amnesty program that will run until September 2016, allowing taxpayers with outstanding tax due to the UK Treasury to regularize their affairs with concessionary penalties rates on offer.

Isle of Man authorities have said that the agreement was drafted after three months of intensive negotiations, and a further Annex (II) will be agreed in due course, to ensure that the agreement is proportionate and that “UK Res Non Doms” are subject to an alternative reporting basis, which recognizes their different status under UK tax law.

The Manx Government underscored that it is committed to involving industry at key parts of this process, particularly concerning technical definitions and ways of simplifying the process. It explained:

"The new agreement between the Isle of Man and the UK, closely modelled on a US FATCA agreement, will result in Manx financial institutions providing a broad range of information on the investments of UK resident taxpayers, which will then be shared automatically with the UK by the Isle of Man tax authorities. The main body of the agreement has been agreed at officer level. Both Governments will work together to minimize the burden on those businesses affected by the new system, and to ensure that detailed guidance is published as soon as possible. In addition, in recognition of their different status under UK tax law, people who are resident but non-domiciled in the UK will be subject to an alternative reporting regime under this agreement.”

The announcement that the Isle of Man would sign the agreement with the UK came on December 7, 2012, when the island's Chief Minister Allan Bell explained that the decision reflected the Isle of Man's commitment to share information with the United States, to facilitate and simplify the implementation of, and compliance with, the US's Foreign Account Tax Compliance Act (FATCA). The agreement with the United Kingdom seeks to extend that level of cooperation to the UK tax authority, HM Revenue and Customs, to ensure that the territory continues to lead from the front on implementing best standards on tax transparency and information exchange.

Commenting on the latest deal on February 20, the Isle of Man's Treasury Minister Eddie Teare stated: ‘The Isle of Man is a highly regarded banking, insurance and wealth management centre. In a world where international taxation issues are being discussed constantly, I want investors to use the island’s business center because it is highly competitive and because of its excellent service providers. Those investors have nothing to fear from using a center known for top-class regulation, transparency and international cooperation: rather they have a lot to gain by investing in the Isle of Man.”

“I will make a further announcement in the near future about when the agreements with the USA and UK will be signed. I remain committed to keeping our private sector fully informed about developments, and I must compliment and thank those business leaders who have worked so closely with Government on FATCA over the past year.”

In exchange for the deal, the Isle of Man Government has confirmed that it has secured an agreement that the UK will revise the double tax agreement the two territories share, including the introduction of automatic information exchange provisions.

TAGS: Isle of Man | compliance | tax | investment | business | law | banking | insurance | international financial centres (IFC) | budget | United Kingdom | tax authority | offshore | agreements | United States | standards | regulation | penalties | Compliance

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