The Isle of Man has been removed from the EU's grey list of non-cooperative tax jurisdictions, along with the other Crown Dependencies, Jersey and Guernsey, after the three worked together with the EU to develop proposals to address the concerns raised.
Chief Minister Howard Quayle tweeted he was "delighted" with the news:
Delighted to see the #IsleofMan removed from the EU's grey list of non-cooperative tax jurisdictions today. This is testament to the ongoing hard work to ensure the #IOM is an internationally responsible jurisdiction. @EU_Commission #tax #transparency #governance #Manx 🇮🇲 https://t.co/rAygI9y2kQ— Howard Quayle (@HowardQuayleMHK) March 12, 2019Delighted to see the #IsleofMan removed from the EU's grey list of non-cooperative tax jurisdictions today.
In December 2017 the Isle of Man was placed in annex II by the EU code of conduct group as there were concerns that the island did not have legal substance requirements for entities doing business in or through the jurisdiction.
It was feared that this might mean the island was a less attractive jurisdiction with which to do business and might therefore damage the Manx economy.
Shortly after the release of the Paradise Papers, the EU announced a crackdown on countries which allowed so-called 'brass plate' companies to turn a profit, without actually doing any business there.
The Isle of Man, Channel Islands, Hong Kong and Switzerland were put on a list of jurisdictions not necessarily considered problematic, but which would have to meet "specific commitments" on tax transparency.
A statement by the General Secretariat of the European Council said that it had been involved in "constant and constructive" dialogue with the Crown Dependencies.
The Crown Dependencies have also agreed to share beneficial ownership details with each other and with the EU for people who are tax residents in the jurisdictions.
The statement said: "Member states should notify the Crown Dependencies that, where they are the jurisdiction of residence of the legal or beneficial owner, exchange of this information would be relevant to them for the administration of their tax regime."