Isle of Man catches up

| 25/06/2009

(CNS): Although UK Crown dependency, the Isle of Man, is already on the OECD ‘white list’, it has only just agreed to share information about those Europeans who save with its banks to EU members. The Cayman Islands, however, which remains on the ‘grey list’ has already been providing this information about its European bank account holders for several years. The move by the Isle of Man was announced at the OECD meeting in Paris this week but it is not due for implementation until 2011.

Isle of Man Treasury Minister Allan Bell said the decision to adopt the measure showed the offshore centre’s desire to remain at the forefront of international tax co-operation and transparency.

Offshore centres have been under growing pressure to conform to international standards of financial transparency since last year, as governments and international bodies focused on the role of tax havens in the financial crisis. The economic downturn has also led to an intensification of national efforts to maximise tax revenues by calling for greater financial openness from offshore jurisdictions.  

This has resulted in a flurry of tax treaty signings in the last few months, in which offshore centres have agreed to share information with specific countries for the purposes of tax investigations. Cayman now has ten treaties in place, while the Isle of Man has fifteen, three over the magic OECD number. However, Cayman already shares bank saving details with 27 European countries, ensuring that citizens of those countries declare the interest they earn here in Cayman for tax purposes in their country of origin.

The Isle of Man is one of three UK Crown dependencies on the ‘white list’ of jurisdictions that have met OECD standards — Guernsey and Jersey being the other two. Although these islands have the 12 Tax Information Exchange Agreements as specified, neither of these jurisdictions meet the EU savings directives yet.  

The Isle of Man is said to be making a greater effort to restore its reputation as a leading financial centre and shrug off the tax haven label, particularly since last year’s collapse of Icelandic bank Kaupthing Singer & Friedlander, which led to the loss of millions of pounds of depositors’ money.

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Comments (8)

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  1. Anonymous says:

    No doubt the OECD would rather  white list and encourage the Isle of Man ,Jersey and Guernsey where  depositors have lost hundreds of millions of dollars Having self  destructed these places are no longer a threat and need help. But  they would need an OECD guarantee to make a difference No bank  failed in the Cayman Islands No depositor lost money.That is what  aggravates the OECD  

    .Depositors get the point  .Waving a white  list around doesn’t replace your life savings. 

  2. Fleeing Guernsey says:

     Anon      I agree that it will take time for the IoM to recover from this – if they ever do. However the IoM at least stumped up £150m from public funds to help stricken savers with lower deposits,having already disbursed £80m from the amount it earmarked. Guernsey has, in stark contrast, steadfastly refused to spend a single penny to help LG savers who lost the majority of their savings with its Government saying it has no "appetite" to do so.

  3. Kent says:

    I have to agree with Offshore Victim in the sense that this report is not objective in its analysis of the system.  However, the question of whether Cayman or IOM are better at disclosing tax information is not the real issue – neither one of them has good policies. 

    Moreover, the tax information exchange agreements which the IOM touts, are fairly meaningless.  In these agreements, the tax information can only be exchanged upon a detailed "request." This means the country making the request essentially has to prove the guilt of the tax evader that they’re investigating before the other country will give them the relevant tax information.  

    Until we implement automatic exchange of tax information, no real change will occur. 

  4. Offshore Victim says:

    Your report is biased and not correct in all respects. The facts are that  all 3 of the UK crown dependencies already share information however EU clients may opt to pay a "retention tax" rather then disclosing information with their home jurisdiction. It is the second option allowing for the individual investor to pay this retention tax (currently set at 20%) that the Isle of man is seeking to revoke. 

  5. Anonymous says:

    Its a pitty the Isle of Man government cannot step up like any other government in the world and secure depositors money.

    The IOM government proposed a scheme which had no financial benefit over and above the DCS in the IOM.

    The new scheme was voted against by depositors. The IOM government now wants the depositors to pay the bill for all their efforts
    Spent on the failed scheme, once again making depositors loose even more.

    I have lost faith in the IOM financial system and will certainly not recommend to anyone to use the IOM’s banking system.

    My personal opinion is that the IOM will never recover from this because people will now see them for who they are,
    Where the financial and legal systems have failed depositors.

  6. SW3 says:

    Sour grapes.

    Unlike the Cayman government, the Isle of Man is proactive in dealing with with its business affairs.

    • Anonymous55 says:

      which no doubt is why even the judge in the KSFIOM liquidation hearings considers IOMs laws to be outdated.

    • Anonymous says:

      One must remember that many of us caught in the KSF IoM debacle are British citizens and were refused bank accounts in England due to absense of standard address/living in the UK. Taxes were paid directly to the crown and, in many cases, direct credit of crown salary in the offshore bank. Can’t have it both ways…….you pay your taxes you expect your government to protect you when the proverbial excrement hits the proverbial fan!