The Isle of Man has been informed by the EU that it must address an existing “lack of legal substance requirements” for companies doing business on the island if it is to avoid being added to the EU’s list of jurisdictions that fall short of its international tax regulatory standards
The island’s chief minister, Howard Quayle, acknowledged earlier last month there was “a very real danger” that the Isle of Man would be added to Brussels’ controversial listing.
The Isle of Man is currently on the EU’s “grey list”of jurisdictions that have committed to undertake specific reforms to their tax practices before the end of the year.
On Monday, Quale addressed parliament and said: “The Isle of Man has an excellent track record in relation to international tax cooperation and meets all the EU listing criteria that relate to such cooperation. It also has an excellent track record when it comes to implementing its commitments.
“The Isle of Man does not, however, have legal substance requirements for all relevant entities doing business in the Isle of Man and this was the concern raised by the Code of Conduct Group that we have been working to address since November 2017,” the minister said.
No international model
“We have been seeking dialogue with the Code Group and all relevant parties to understand better exactly what is required as this is a concern that had not been raised with us before and there are no international model requirements to work from.
“We have also sought the assistance from the OECD and have been working closely with Jersey and Guernsey,” Quayle said.