Isle of Man Rebuts "Offshore Tax Haven" Criticism by Agreeing Further Tax Information Exchange Agreements

Since 2002, the Isle of Man has signed a number of tax information exchange agreements (“TIEAs”) with countries such as the United States, United Kingdom, Australia, Republic of Ireland, the Netherlands and the Nordic countries.  The rational behind entering into the agreements was to comply with The Organisation for Economic Co-operation & Development’s (“OECD”), model for international standard on tax co-operation.

The OECD which represents 30 of the largest economies in the world considers it harmful if countries do not exchange tax information on request in order to assist each other with tax investigations in an attempt to remove practices that facilitate tax evasion.  This view is also shared by many non-OECD member countries.

The Isle of Man has over the last seven years worked towards strengthening its regulatory regime and improving its international reputation as a low tax jurisdiction.  As part of this drive the Isle of Man has now concluded 14 agreements including a recent agreement with Germany and one with France announced today.

It is clear that the pressure being mounted against “offshore jurisdictions” has gathered momentum over the last year, in particular against jurisdictions such as Switzerland and Liechtenstein.  As part of the continued offensive by the US and the EU, better regulated jurisdictions like the Isle of Man have over the last year increased their efforts to conclude TIEAs in an attempt to avoid possible blacklisting by the G20 and separate it from other “offshore” jurisdictions which are less regulated and transparent.  The Isle of Man has also tightened its regulatory regime which an IMF report should endorse shortly.

Further clarification will come over the forthcoming months, however more positive tones have emanated from the Isle of Man government which is more confident of any future blacklisting.