International tax agreement comes into force
- 30 June 2014
- From the section Isle of Man Video & Audio
An international agreement aimed at clamping down on tax evasion comes into force on Tuesday.
The Foreign Account Tax Compliance Act (FATCA), ensures an automatic reciprocal exchange of tax information.
Last year, the Manx government signed up to the United Kingdom FATCA and the USA FATCA.
The US government introduced the deal in a bid to recover an estimated $100bn (£60bn) a year in unpaid taxes on funds held in overseas accounts.
The law means all financial institutions around the world have to report the assets and incomes of any US citizens with $50,000 (£30,000) on their books directly to the US Internal Revenue Service.
The UK FATCA regime applies to all Britain's Crown Dependencies and Overseas Territories, and requires the automatic exchange of tax information about UK citizens.
Companies that do not comply could have 30% of any dividends and interest payments withheld.
In a joint statement, the chief ministers of the Isle of Man, Guernsey and Jersey said the agreement showed their commitment to tax transparency and would enhance their international relationships.