Tax sharing has to comply with data protection

Alfred Cannan MHK

Alfred Cannan MHK

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Personal tax data disclosed to authorities in the US and UK under recently-signed FATCA deals must comply with Data Protection rules.

In Tynwald, Michael MHK Alfred Cannan asked the Chief Minister whether the Data Protection Act allowed for information to be transferred to other tax authorities.

Inter-governmental agreements on the automatic exchange of tax information were signed with the UK government in October last year and the US in December.

In his written reply, Allan Bell said: ‘As the transfer of the data is being made to comply with a legal obligation created by these agreements and the forthcoming regulations, and the data concerned is in respect of individuals, the disclosure must be made in accordance with, but is not prevented by, the Data Protection Act 2002.’

He added: ‘Under the fair processing requirements of the first data protection principle, the reporting financial institution is obliged to inform its customers that their personal data will be transferred to the relevant jurisdictions. Consent for the information to be processed, reported and transferred is not required from the relevant individuals.’

Mr Bell said the Income Tax Division and the financial institution providing the information are the data controllers and, therefore, must comply with the Data Protection Act, the latter responsible for the accuracy of the information and the former responsible for the transfer to the relevant jurisdictions.

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