The newly published reports outlined the results of assessments of the legal frameworks for the transparency and the exchange of tax information in Hungary, the Philippines, Singapore, and Switzerland. Five additional reports were also released on the current practice of implementation of international tax exchange information in the Isle of Man, Italy, France, New Zealand and the USA.

In the report on Switzerland it was noted that over the last two years the government of the country has had a significant change in its attitude and toward tax information exchange, and rapid progress has been made to bring national rules in line with internationally agreed standards. However, it was noted that several of the country’s currently signed exchange agreements are still below modern standards and need to be reviewed, and will be reassessed by the Forum in a subsequent peer review in the second half of 2012.

In their respective reviews, the Philippines and Singapore were regarded as having made significant process to meeting international standards, but were deemed as being deficient in the number of international agreements that they hold, with the Global Forum stating that not all relevant international partners are covered in the currently signed network of agreements.
Hungary was seen as having several deficiencies, most notably a lack of information provided about partnerships and companies registered in the country. Hungary’s next peer review is scheduled for early 2014.

The separate peer reviews of Italy, the United States, and France, all noted that each country already has an extensive network of tax information exchange agreements, covering most of their major trading and economic partners. It was also noted that the international standards of tax information exchange are being adequately met. However, all three countries were recommended to investigate methods to speed up response times to requests for information from their international partners.

The review of the Isle of Man praised the country’s network of singed information exchange treaties, but suggested that improvements could be made to the availability of accounting information on limited partnerships. The review of New Zealand found that the country follows acceptable standards of information exchange, but there were some shortfalls in the reporting of accounting records and information regarding the beneficial owners of of liquidated companies.

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As reported earlier, at the Budget reading held on February 16th, Allan Bell, Isle of Man Treasury Minister, stated that the jurisdiction would hold an investigation into possible changes to its current tax regime in order to address issues raised by previous discussions held with the EU and its member states, particularly the UK. The scope of the consultation includes ascertaining the nature of changes which could be implemented for the jurisdiction, and the optimality of the proposed options.

Throughout the consultation the Government is seeking options which will fulfill conditions of the current EU Codes of Conduct of Business Taxation, meeting the needs of established local businesses and allowing them to grow. At the same time, one of the Government’s main priorities is to increase the attractiveness of the jurisdiction for international businesses and investors.

The current consultation process, which continues until May 28th 2010, is the first step of the Isle of Man’s current tax regime review. Within the first half of 2010 the Government also intends to conduct an investigation into the tax regimes of EU member states, while exploring the rationale which will be applied by an EU expert group assessing the Isle of Man taxation legislations. Throughout the entire process, international firm Deloitte Touche Tohmatsu will be engaged in a consultancy capacity for the Isle of Man Government.

The Isle of Man is a small island nation located in the Irish Sea; being scant in natural resources it relies heavily on attracting international investment to maintain a buoyant economy. The jurisdiction’s tax system is considered to be an attractive corporate tax planning vehicle, and draws significant of numbers international investors. Although, in 1999 EU experts issued a report which deemed the Isle of Man’s treatment of international business companies, exempt insurance companies; and non-resident companies, international loan and banking business, and 75% tax exemption for fund management to be unaligned with the EU Code of Conduct for Business Taxation. Since that time the Isle of Man has held continued discussions with EU member states and the UK regarding harmonization of national tax legislation.

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