Isle of Man

Isle of Man tax transparency could change after UK commitment


By added on 25/07/2018

(Manx Radio) -- A decision by the UK to follow EU financial rules could push the Isle of Man into taking steps towards greater tax transparency.

A letter sent by a UK government department to Labour MP Dame Margaret Hodge confirmed its intention to adopt the EU's 'fifth anti-money laundering directive'.

Ms Hodge, who visited the Island recently, said the decision is a 'further step towards the eradication of tax avoidance' and the Crown Dependencies should now 'fall into line'.

The directive requires member states to make registers of beneficial company ownership public by 2019 - 2020, and to allow law enforcement agencies, NGOs and journalists access to data on the 'real owners' of trusts.

UK access to EU markets post-Brexit is thought to hinge on a willingness to comply with the bloc's financial standards.

The measures were first put together by the EU in response to the 'rise of terrorism' and the exposure of tax avoidance schemes following the 'paradise papers' data leak, which featured the Isle of Man heavily.

Despite the UK's decision to follow the EU's lead on these transparency regulations, the Isle of Man as a Crown Dependency can choose whether or not to implement the directive.

Currently the Manx government's register of beneficial ownership is not public, but is available on request to law enforcement agencies and other tax jurisdictions.

Chief Minister Howard Quayle has previously stated the Island would not be forced into making changes by the UK parliament, and already meets many of the 'highest international standards' on tax avoidance.

The Tax Justice Network is a UK-based NGO which monitors offshore financial centres and advocates for 'socially just' tax systems.