EUSD announcement
Updated July 2010
EU SAVINGS DIRECTIVE ANNOUNCEMENT
Important information for Isle of Man
accountholders
The Isle of Man Treasury recently announced
that from 1 July 2011, EU resident individuals who hold Isle of Man
based bank accounts and who are subject to the European Union
Savings Directive (EUSD)* will no longer be able to choose the
"retention tax" (also known as "withholding tax") option available
under the directive. Instead, the Isle of Man Treasury will move to
automatic "exchange of information" and the retention tax option
will be withdrawn on the above date for Isle of Man accountholders.
Your account/s will be automatically updated to reflect this
change. If you have already chosen the exchange of information
option, you will not be affected by these changes.
The move to automatic exchange of information
is another step towards greater international tax co-operation and
enhanced transparency, and acts as a clear indication of the
island's commitment to high standards of regulation. The Isle of
Man is widely regarded as leading the way in how small
jurisdictions with financial centres should operate, and the move
has been welcomed by many, including the UK government.
The announcement follows the island's
achievement of "white list" status on the OECD's (Organisation for
Economic Co-operation and Development) list of countries complying
with the global standard for tax co-operation and exchange of
information, published earlier in the year. Jersey also achieved
white list status and both jurisdictions are working to enhance
their reputations as well-regulated financial centres even
further.
It is expected that many other offshore
financial centres will also switch to exchange of information by 1
July 2011, rather than introducing the increased rate of
withholding tax which is due to rise to 35% (from the current rate
of 20%) on the above date. The Isle of Man Treasury has chosen to
exchange information rather than introduce the increased level of
withholding tax.
Under the automatic exchange of information
provisions, banks resident in the Isle of Man will be required to
provide details of individual account holders and the interest
received. In practice, this means that we will collect details
including your name, address, bank account number, tax
identification number and country of tax residence. These details,
together with the amount of interest received and the period to
which the interest relates, will be passed to the Isle of Man tax
authority, which in turn will pass this information to the tax
authority in your country of residence. Disclosure will occur on an
annual basis.
*To help identify whether you are affected by
the EUSD, please use the flow chart
provided.
Further
information on the EUSD is available online.