Tax transparency remains the primary goal for many governments around the world. Over recent years, the Automatic Exchange of Information has been the focus with multiple models having been implemented which provide the requirement for the automatic exchange of information.
In 2010, the United States introduced the Foreign Account Tax Compliance Act (FATCA) for the purpose of reducing tax evasion by their citizens. FATCA requires Financial Institutions outside the US to report information on financial accounts held by their US customers to the Internal Revenue Service (IRS). On 13 December 2013, the Isle of Man and the United States of America signed an Agreement to improve International Tax Compliance and to implement FATCA. The Isle of Man completed its first exchange of financial account information with the US in September 2015.
In 2014, the Organisation for Economic Co-operation and Development (OECD) developed the Common Reporting Standard (CRS) to put into practice a global model of automatic exchange of information. The Isle of Man made an early commitment to the CRS and in 2014 signed the Multilateral Competent Authority Agreement. As an ‘early adopter’ of the CRS, the Isle of Man completed its first exchanges of financial account information in September 2017.
Under both FATCA and CRS, Isle of Man Financial Institutions are required to provide the Assessor of Income Tax with financial account information on an annual basis which the Assessor will then automatically exchange with other reportable jurisdictions.
The reporting deadline for Financial Institutions in the Isle of Man is the 30th June.