Isle of Man treasury minister hails tax treaties

THE ISLE of Man's treasury minister says he hopes the two tax agreements signed with the Government yesterday will "draw a line in the sand" about the perception that the island's financial services industry has been abused by Irish residents to evade tax.

Allan Bell said he was "unhappy" about the public perception but he hoped the tax agreements reached with Tánaiste and Minister for Finance Brian Cowen would mark "a turning point".

"The press reports have been less than helpful, but the way the Isle of Man has developed in recent times, we would hope to indicate that the perception which has been generated through the press is, in fact, false. The Isle of Man has been fully co-operative on certain issues which have arisen," said Mr Bell.

The agreements cover the exchange of tax information, procedures for calculating company profits and relief for some individuals from double taxation.

Mr Bell said he hoped the agreements would lead to greater business and economic co-operation and that he would be able to start talks with the Irish Government on a full double-taxation agreement between the two islands.

Malcolm Couch, head of the Isle of Man's tax administration, said the agreements would enable the Revenue to make a request for information if it had "bona fide" evidence on a matter it was investigating related to the Isle of Man.

"It is a very powerful sort of agreement. It doesn't give the commissioners the opportunity to mount fishing expeditions . . . It must be focused on particular taxpayers," he said.

Deposits and assets held by Irish residents in the Isle of Man were targeted by Revenue as part of its investigation into overseas assets held by Irish residents. The inquiry has so far yielded €910 million. Revenue obtained details on Irish residents with overseas assets by securing information as through court orders obtained against institutions in the Republic.

Mr Bell said the Isle of Man has been "very unfairly" associated with tax havens around the world.

"The Isle of Man is most definitely not a tax haven . . . We fully co-operate on criminal matters and have done for a great many years with other jurisdictions."

He said the Isle of Man's tax take as a percentage of the island's GDP was 34 per cent, compared to 30 per cent in Ireland and the OECD average of 36 per cent.