THE Isle of Man is to work with its rivals in the Channel Islands to negotiate with the United States.
The island and Guernsey and Jersey simultaneously announced this morning their intention to negotiate partnership agreements with the USA to implement FATCA, the USA’s Foreign Account Tax Compliance Act.
FATCA forces American taxpayers to declare financial assets held overseas and overseas financial institutions to report on assets owned by US taxpayers.
Agreements between the islands will follow the model intergovernmental agreement published by the American government on July 26, 2012, and will be similar in form to the agreement between the UK and the USA signed on September 12, 2012.
The Manx government said this followed follows consultation with industry representatives who had given their support for the proposed course of action.
Discussions have taken place at official level between the Crown Dependencies jointly and the USA. Formal negotiations will now take place with the intention of concluding intergovernmental agreements rapidly.
Once signed, they will be subject to ratification by each of the island parliaments and implementation of the agreements will be through the domestic legislative procedures relevant to each of the three jurisdictions.
Treasury Minister Eddie Teare MHK said: ‘Basing FATCA implementation on an intergovernmental agreement is preferred by our industry and I am pleased to confirm our intention to follow this approach with the US government.
‘The simultaneous announcement today provides certainty for our business community as they also prepare for FATCA.
‘Entering into this type of arrangement highlights and confirms the Isle of Man’s commitments to being a well-regulated jurisdiction which co-operates with other countries on tax matters in accordance with internationally agreed tax standards on transparency and exchange of information.
‘I am particularly pleased that the three Crown Dependencies are working together and are taking a common approach on this issue.’
On its website, the USA’s Internal Revenue Service - the body that collects federal taxes - says: ‘FATCA is an important development in U.S. efforts to improve tax compliance involving foreign financial assets and offshore accounts.
‘Under FATCA, U.S. taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS.
‘In addition, FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.’
President Barack Obama has made a number of critical comments regarding what he called ‘tax havens’, especially before he was elected in 2008.
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Weather for Isle of Man
Tuesday 21 May 2013
Temperature: 9 C to 13 C
Wind Speed: 36 mph
Wind direction: North west
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