PracticeConsultingIsle of Man tax u-turn

Isle of Man tax u-turn

With the OECD's list of harmful tax regimes imminent, Gavin Hinks looks at the private sector pressure that forced the Isle of Man to toe the line

Private sector pressure on the Isle of Man government to get off a tax haven black list grew when a major European bank decided not to move to the offshore jurisdiction in the Irish Sea.

Bank officials visited the island but told senior business figures close to the Manx government that it would not consider locating an office there until it was off the OECD’s list of so called ‘harmful tax regimes’.

The revelation comes just weeks before the OECD is expected to publish its final list of harmful tax regimes at the end of July. Shortly after the mystery bank’s departure the island’s government entered into negotiations and agreed to OECD requirements on condition that the rest of the 34 jurisdictions on the list comply.

However, in a surprise move the USA recently withdrew support for the OECD’s measure removing at a stroke any chance that the offshore tax regimes will be the subject of sanctions.

The Isle of Man had at first refused to comply with the OECD but after its conditional agreement to transparency, non-discrimination and the effective exchange of information, it was removed from the list.

Gregory Jones, a tax partner with KPMG on the island, said: ‘This whole exercise has produced more confidence on the island and skills have been developed in dealing with the OECD.’

For more on the OECD crackdown, see www.accountancyage.com/Tax/1121663.

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