On Friday 13th December Chief Minister Allan Bell MHK signed an intergovernmental agreement with the United States to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA).
The agreement, signed at the US Embassy in London, follows the ground breaking agreement the Isle of Man signed with the UK just over a month ago.
FATCA is a US initiative which requires financial institutions to report information on accounts held by US taxpayers.
The Isle of Man has signed a Model 1A agreement which requires companies in the Isle of Man to report the required information directly to the Income Tax Division for onward transmission to the US. It is a reciprocal agreement and information will be exchanged from 2015.
The Chief Minister said: ‘The Isle of Man has been at the forefront of developments in transparency and tax information exchange for many years and today’s signing is an important next step. The signing of this agreement further enhances the Isle of Man’s reputation as a transparent and responsible centre for international business. We look forward to working with the US to ensure the agreement’s effective and efficient implementation.
‘The Isle of Man is also fully committed to working towards a new global standard in automatic exchange of information and is actively engaged in the development of a single global standard.’
The intergovernmental agreement was signed on behalf of the United States Government by His Excellency Matthew Burzan, US Ambassador to the UK.
Treasury Minister Eddie Teare MHK added: ‘The signing of this Model 1A agreement is important both domestically and internationally. I know many Isle of Man financial institutions have been waiting for this agreement and will welcome the certainty it provides. It will serve to enhance and strengthen business links between the Isle of Man and the US and further demonstrates the Island’s commitment to transparency.’
The next step for the Isle of Man will be to publish Guidance Notes covering both the US FATCA agreement and the similar agreement signed recently with the UK.
These notes have been developed in conjunction with Jersey and Guernsey, who also signed the intergovernmental agreement in London today, in order to ensure consistency for financial institutions and will be issued for consultation early next year.