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Isle of Man and Switzerland sign up to tax transparency

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The UK and Isle of Man governments signed an intergovernmental agreement (IGA) to ‘improve international tax compliance’ on 10 October. The agreement is modelled on the UK/US IGA, which provided a mechanism for UK financial institutions to comply with obligations under the FATCA legislation without breaching UK data protection law. It is the first such agreement that does not involve the US. HMRC has published ‘selected areas of draft guidance’, and will publish draft regulations and further draft guidance later this year.

An exchange of letters signed on 10 October, amending the existing UK/IoM double taxation agreement, will permit ‘comprehensive automatic and spontaneous exchanges of information’, HMRC said.

Meanwhile, Switzerland has become the 58th country to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the OECD announced. The Financial Times reported that the development was ‘the latest sign that the world’s biggest offshore centre is yielding to international pressure over secrecy’. G20 leaders had said they expected all jurisdictions to join the convention ‘without delay’. The FT added: ‘Switzerland, with its long tradition of bank secrecy, has a pivotal role to play in the international transparency drive because of its scale, with $2.2trn of offshore assets under management, according to the Boston Consulting Group.’