UK Chancellor George Osborne has announced in Washington that the Isle of Man has become the first British dependency to sign an agreement with the UK on automatic sharing of tax information.
It follows the introduction of the Foreign Account Tax Compliance Act (FATCA) in the United States.
FATCA was implemented by the US government to clamp down on the growing number of US citizens who were discovered trying to evade tax by holding bank and wealth accounts overseas.
Isle of Man Chief Minister Allan Bell said the signing of the deal was “world leading” for the Isle of Man and would “once and for all rid us of the outdated name of tax haven”.
He continued: "In signing this historic agreement with the United Kingdom, we are underlining the message to our neighbours and the wider world that our Island is a responsible centre for top quality international business.
"The Isle of Man was the first to strike this agreement with the UK and we are now the first to sign, demonstrating the clear commitment of both countries to the development of a new global standard in automatic exchange.This undoubtedly will become the global standard, the shape of things to come”.
A similar deal with the United States is expected to be signed shortly.
The Island already shares information automatically on personal savings income with the UK and other EU countries but the new agreement will extend disclosure to include companies and trusts as from 2016.
Commented DCTS Director Paul Swindale: “This is a welcome agreement and a natural evolution in a world of tax transparency and share of information. Our world continues to change and the Isle of Man’s reputation on the International stage can only prosper through signing agreements of this nature. As providers of corporate services in such a well regulated jurisdiction it is important we embrace this change and communicate to our clients and our professional intermediaries this positive development”.