THE outcome of the meeting of the EU Code of Conduct on Business Taxation Group on the Isle of Man’s Attribution Regime for Individuals (ARI) contains no surprises, Treasury Minister Anne Craine MHK confirmed today.
The Minister said, “Indications from the UK Treasury are that, as expected, the Code Group considers the ARI in combination with the Island’s corporate tax system to be harmful.”
Mrs Craine explained that the personal taxation anti-avoidance measure had been under scrutiny by the Code Group, which in 2003 had agreed - along with the EU’s Economic and Financial Affairs Council (ECOFIN) - that zero-ten systems as such were not harmful.
She added, “As we had been anticipating that ARI would be found to be harmful, I moved to abolish it in last week’s budget. We remain committed to our policy of being a good neighbour, which encompasses being responsive to the views of the European Union.
“At the same time, the Isle of Man is fiscally independent, and participates in the Code of Conduct process on a voluntary basis.
“It is not in the Island’s interests to have aspects of our tax system which the EU sees as causing difficulty. Removing the ARI should end concerns over the Island’s zero-ten company tax system.”
The Code Group is not a decision-making body, and will send a report with its recommendations to ECOFIN. Formal notification of ECOFIN’s decision is not anticipated until after it meets in May or June.
