It is official: the Isle of Man is NOT a Tax Haven
by James Green on 02/04/09 at 9:20 pm
As promised by Gordon Brown at the end of the G20 summit today, the OECD (Organisation for Economic Cooperation and Development) has provided a detailed report on progress by financial centres around the world towards implementation of an internationally agreed standard on exchange of information for tax purposes.
The list is split into four sections and at the very top are those countries that are the most compliant with agreed international standards. That list includes the United Kingdom, Guernsey, Jersey and the Isle of Man along with the USA, Germany, France and most of the other major countries of the world.
So, according to the OECD the Isle of Man is in the same category as the UK, the USA, Germany & France – the most vociferous critics of what they call “tax havens”. Well guys, if we are a tax haven – so are you!
The second category contains those countries that the OECD declared were “Tax Havens” back in 1998 but which committed to meet the agreed information exchange standards – but have not yet delivered. This is the biggest category and it includes Panama, the Cayman Islands and all the usual suspects.
However the third category – less compliant than the tax havens above – lists eight countries which were not included in the original list of “Tax Havens” and of these eight 3 are full EU member states – Austria, Belgium & Luxembourg – as well as Switzerland, a member of the EEA. As I have said before – these are the real tax havens, hiding within the EU. But the OECD doesn’t really want to say so. These countries are called “Other Financial Centres” but when you look at the number of tax exchange agreements these countries have (that’s the main criteria) you will see that they are on a par with places like Panama and less compliant than the British Virgin Islands. Politics!
You can view the full report here.
You will note that the OECD quite clearly talk about Tax Evasion rather than Tax Avoidance. This is quite correct. Tax Evasion is illegal – Tax Avoidance is legal. Forget the crap that Gordon Brown and Alistair Darling have been spouting. All they are doing is trying to blame someone else – anyone else - for their own failure.
No doubt there will be more to comment on in the next few days so do please come back regularly.
Web Design Jersey
Apr 3rd, 2009
Good post – and about time this was cleared up. The OECD has never really had an issue with the Isle of Man or Channel Islands – but Gordon and his cronies clearly have, in their hunt for someone to blame.
Oh well, Mr Brown, better eye up someone elses tax revenue and start looking for a new scapegoat..!
James Green
Apr 3rd, 2009
It will be interesting to see if Brown and Darling do turn elsewhere. I have my doubts that they will as they really do have it in for these islands. What I particularly resent is the continual pressure from HM Government and HMRC which tries to suggest that tax avoidance is illegal. Press and public just don’t understand the difference.
Time will tell.
David Adams
Jun 1st, 2009
Despite the Isle of Man and several other British territories being given a clean bill of health by the OECD it seems that Brown and Obama still have it in for you guys. What’s the view on the island?
James Green
Jun 1st, 2009
In general everyone seems pretty upbeat about making the “white list” but we know that the attacks on offshore territories isn’t really about fighting crime but rather its a way to collect more tax.
On Saturday 23rd May Vince Cable, the LibDem treasury spokesman addressed a dinner organised by the Isle of Man branch of the Institute of Directors. During his speech, and the question and answer session, he made it clear that what was on the agenda of the UK and US governments was to stop legal tax avoidance. Everyone knows that tax avoidance is legal while tax evasion is illegal. But it seems that principal, accepted by the British courts for more than 200 years, is under attack.
David Irwin
Jun 2nd, 2009
It really is unacceptable for big countries like the UK and US to try and outlaw legal tax planning. It seems that having failed to ciminalise tax avoidance (at least in the UK) by the back door by claiming it was money laundering or terrorist related they want to completely change centuries old legal precedent. How on earth can they do this?
Doug
Jun 5th, 2009
Of course they are tax havens. The OECD doesn’t know what the hell it is talking about. Time for these islands to be financially raised to the ground.
James Green
Jun 5th, 2009
This shows a remarkable ignorance of the facts. The fact is that the Isle of Man is a low tax country because it is run by a non party-political system where huge sums of money are not wasted on social engineering projects and also because the government do not borrow to fund them.
It is of course easier to do this in a small country but that doesn’t make us a tax haven in the pejorative sense that you mean. I recently had the task of introducing and questioning the LibDem treasury spokesman Dr Vince Cable at an Institute of Directors dinner here on the island. He accepted that the UK could learn a lot from the way things are run here (and I’m not saying that its all perfect) and also that what “leaders” such as Obama and Brown really wanted was to stamp out “legal tax avoidance”. In other words overturn several centuries of the legal precedent that a taxpayer has the right to arrange their financial affairs so as to pay as little tax as possible. (Remember, this is exactly what people with PEPs ISAs SIPPS etc are doing.)
I just wonder what it is that makes someone like Brown think that he has the right to raise taxes – direct, indirect, stealth – call them what you may – just to satisfy his own political agenda and pay for his government’s incompetence and waste of public money.
Helen
Jun 5th, 2009
Well said James. Brown can’t tax his own citizens any more than he already does so he wants to harm the economies of small countried having already run the UK into the ground.
Guernsey Stamp
Jan 20th, 2010
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