Financial Transparency Coalition

From HM Treasury:

UK Government welcomes Isle of Man Tax Reforms

The UK Government has welcomed today’s announcement by the Isle of Man to improve the transparency of their tax regulations by announcing plans for the automatic exchange of information on savings interest with the UK and other EU Member States.

The move means the withholding tax option currently available to customers having accounts with Isle of Man financial institutions by virtue of the transitional arrangements under the European Union Savings Directive framework (EUSD) will be withdrawn by July 2011.

Responding to the announcement, Stephen Timms, Financial Secretary to the Treasury, said:

”I warmly welcome this move by the Isle of Man, which reflects the aim of the Savings Directive to promote exchange of information for tax purposes. This will enhance transparency and help ensure that tax is paid where it is due. We encourage all jurisdictions that apply the transitional withholding tax to move to exchange of information as soon as possible.”

Willy Bach, the Ministry of Justice Minister responsible for the Crown Dependencies said:

“I welcome the Isle of Man’s decision to move to automatic exchange of information under the EU Savings Directive.  This is a clear indication of their commitment to high standards of regulation and tax-transparency and shows that they lead the way in terms of how small jurisdictions with financial services centres should operate.”

The Isle of Man Treasury Minister, Allan Bell, MHK, announced the new tax regulation plans in his speech at the annual Organisation for Economic Co-operation and Development (OECD) Forum in Paris.

Notes for Editors

1.  The Isle of Man participates in the framework of the EU Savings Directive under Agreements with the 27 Member States.

2.  The aim of the Savings Directive is automatic exchange of information between tax authorities on savings interest.   Some Member States and other participating jurisdictions apply withholding tax on the accounts of the tax residents of other Member States as a transition measure, instead of automatic exchange of information.

3.  The Isle of Man is one of the Crown Dependencies, the others being the Bailiwicks of Jersey and Guernsey.  The Islands are not part of the UK but are self-governing dependencies of the Crown.  This means they have their own directly elected legislative assemblies, administrative, fiscal and legal systems and their own courts of the law.

4. The UK Government is constitutionally responsible for the defence and international representation of the Crown Dependencies.  The Ministry of Justice is the main department responsible for managing the relationship between the Crown Dependencies and the UK.

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