Tax exchange agreements are ‘redundant’, says IoM’s Allan Bell
The last TIEA it signed bilaterally was with the Czech Republic in July 2011 to give a total of 29, alongside its 10 double taxation agreements.
Speaking to International Adviser, Bell said: “My own view is that frankly TIEAs are redundant now. They’ve served their purpose by stimulating FATCA, and that period of work was absolutely essential to lay the groundwork for the new global structure of tax information.”
He said many countries would not move straight into a DTA and instead opted for a TIEA instead to test the water.
In response to concerns among some of those in the Isle of Man’s financial sector about there not being enough bilateral double taxation agreements, Bell accepted the number of DTAs signed had “eased off”.
He also said that Malta, which has many more taxation agreements than the Isle of Man, has an advantage as a member of the EU in getting other EU partners to sign up.
“There is no strategy on our part to pull back from signing DTAs. I know there are a number of discussions going on between the assessor of income tax and various countries to take this forward.”
The Isle of Man government, in common with other smaller jurisdictions, had limited resources and relatively few staff to deal with the often long and protracted discussions with countries to develop DTAs in the first place, he added.
Bell said how the Isle of Man had accepted from a very early stage the “grand US demand that we all sign up to FATCA”, and that the island was the first small jurisdiction outside of the EU to sign automatic exchange of information with EU countries.
“We didn’t have to do it at the time, but we did it because I recognised at the time that this was the direction of travel. It increases transparency, it absolutely brings fairness into the system and it is now taking over from TIEAs.”