I have worked with Dominion for 4 years and never had a complaint about their professionalism and competence. The staff have a great attitude and are always on hand to help.Client Representative, 38m Motor Yacht
Good news for the Isle of Man
Yesterday the EU confirmed that the Isle of Man has met its commitments in response to the EU’s attempts to tackle “non-cooperative jurisdictions”. As such, the Island, together with 24 other jurisdictions including Jersey and Guernsey, has avoided being “blacklisted” and, moreover, has for now been cleared from further scrutiny as part of the EU’s ongoing initiatives in this area.
Jurisdictions including the British Virgin Islands and the Cayman Islands remain on the list of countries where further work is necessary before similar clearance is given by the EU, whilst a further 10 jurisdictions, including Bermuda, have been added to the 5 originally blacklisted to give a revised black list comprising 15 jurisdictions.
By way of background, in 2016 the EU commenced work on a list of non-cooperative jurisdictions for tax purposes. During 2017 the EU screened some 92 jurisdictions against criteria based upon transparency, fair taxation and the implementation of measures under the OECD’s Base Erosion and Profit Shifting (“BEPS”) initiative. In December 2017 an initial list was published, effectively comprising a “black list” and a “grey list”. The black list initially consisted of 17 (and later 5) non-cooperative jurisdictions, i.e. those which were deemed to have failed to take meaningful action or engage in a meaningful dialogue in response to specific concerns previously raised by the EU. The “grey list” contained those jurisdictions which had made meaningful commitments to take action by agreed deadlines and was sub-divided depending on the nature of the commitment made.
The Isle of Man found itself, together with the other Crown Dependencies and several British Overseas Territories, on the grey list of jurisdictions committed to addressing concerns relating to economic substance. This was on the basis that the zero percent tax rate regimes (or complete absence of corporate tax) in these jurisdictions was considered by the EU to facilitate offshore structures or arrangements aimed at attracting profits which were not reflected by real economic activity performed in the jurisdiction.
Specifically, the Isle of Man committed to pass legislation, by the end of 2018, requiring certain types of Isle of Man resident companies to satisfy so-called “substance requirements”.
Accordingly, the Income Tax (Substance Requirements) Order 2018 passed through Tynwald on 11 December 2018, representing the Isle of Man’s attempt to comply with this commitment.
Whilst it should be noted that the OECD are undertaking their own initiative as regards economic substance requirements, nevertheless, today’s welcome news confirms that the introduction of this legislation has been seen by the EU as satisfying the commitment made to it by the Isle of Man.
This information was transmitted by KPMG Isle of Man.