Isle of Man to sign tax sharing agreement with UK
- 7 December 2012
- From the section Isle Of Man / Ellan Vannin
The Isle of Man government has confirmed it is to sign a tax information sharing agreement with the UK to combat tax evasion.
Under the agreement, the Isle of Man and UK will automatically exchange a wide range of information on tax residents, on a reciprocal basis.
Chief Minister Allan Bell MHK described the move as a "major repositioning of the Isle of Man for the future".
The UK is looking to agree similar deals with both Guernsey and Jersey.
The agreement follows the introduction of the Foreign Account Tax Compliance Act (FATCA) in the Unites States.
FATCA was implemented by the US government to clamp down on the growing number of US citizens who were discovered trying to evade tax by holding bank and wealth accounts overseas.
The Exchequer Secretary to the UK Treasury, David Gauke said the agreement would "significantly boost the UK's ability to tackle cross-border tax evasion".
He said: "Automatic information exchange is an important tool in boosting our ability to clamp down on those who seek to hide their money overseas.
"For years people said this couldn't be done, so I welcome the progress we have made so far with the Isle of Man."
Mr Bell, said: "The Isle of Man has worked hard to co-operate with the international community for some 15 years to develop new standards of transparency to oversee the international financial services industry.
"The United States has recently taken that on to a different level by introducing FATCA, which is an automatic exchange of information on tax matters relating to all aspects of business for all US resident business people."
The Isle of Man has signed up to this agreement and is currently negotiating a new version for the island, according to Mr Bell.
He said: "Following this move the UK have said they want a similar agreement.
'May cost jobs'
"We have considered the pros and cons and we feel the time is right to announce that we will commit to the UK to provide automatic exchange of information on all business matters within the framework of a FATCA structure."
The agreement will see the two governments adopt new enhanced reciprocal tax information sharing arrangements, under which they will automatically exchange information on tax residents on an annual basis.
Mr Bell said: "This decision is a well-considered next step in the island's long-established policy of commitment to being at the forefront of tax transparency and international co-operation."
He added: "It is too early to know what the implications of the agreement will be. It may cost jobs and we have to accept that. We have to send out a strong message to the outside world that we are no longer willing to consider that sort of business.
"We want to show the outside world that we are a genuine partner and we recognise where the debate is going and we want to be at the forefront of that debate."