Speaking at the OECD Forum in Paris, Allan Bell, MHK, The Isle of Man Treasury Minister, announced new tax regulation plans that include automatic exchange of information on savings interest with the UK and other EU Member States. 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by virtue of the transitional arrangements under the European Union Savings Directive framework (EUSD) will be withdrawn by July 2011.
Stephen Timms, Financial Secretary to H.M. 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.”*
The Ministry of Justice Minister responsible for the Crown Dependencies, Willy Bach, also commented on the announcement, saying, *“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 its 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.”*
Under Agreements with the 27 Member States, the Isle of Man participates in the framework of the EU Savings Directive, which aims at automatic exchange of information between tax authorities on savings interest. Some Member States and other participating jurisdictions have been applying withholding tax on the accounts of the tax residents of other Member States as a transition measure, instead of automatic exchange of information.