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From the year ended 31 December 2014 onwards a large number of financial institutions and non-financial foreign entities have been under the obligation to collect, verify and report information on its customers to the Isle of Man Tax Authorities. This requirement for reporting has been imposed by the Foreign Account Tax Compliance Act (FATCA) and other equivalent legislation.
Following the US FATCA model, the Organization for Economic Cooperation and Development (OECD) issued a new global version of FATCA called the “Global Standard for Automatic Exchange of Information”, but better known as the Common Reporting Standard (CRS) which facilitates the exchange of detailed account information between governments.
The Isle of Man, like Norway, Sweden, Denmark, the United Kingdom and a number of other countries, signed an agreement in July 2015 to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters. This agreement specifies the details of what information will be exchanged and when, as set out in the CRS.
The Income Tax (Approved International Agreements) (Implementation) (Common Reporting Standard) Regulations, 2015 (the Regulations) implementing the CRS were made on 23 November 2015, and took effect from 1 December 2015. The Regulations had the effect of requiring Isle of Man Financial Institutions (including Monument International Life Assurance Company Limited ((Monument International)) to apply the CRS due diligence procedures to all financial accounts they maintain from 1 January 2016.
Under CRS, Isle of Man Financial Institutions report to the Guernsey Tax Authorities who will then share the information with the appropriate foreign tax authorities.
All products provided by Monument International with the exception of group life, disability and accident products fall within scope of CRS. Reporting on the products within scope commenced as early as 30 June 2017 (depending on the CRS participating countries at that time).
The main requirements arising from the CRS has been the identification and declaration of legal persons (i.e. companies and natural persons) meeting the criteria as defined in the CRS as well as the reporting of balances and payments in respect of those persons that are reportable.
The requirements contained in the CRS are as follows:
N.B. If Monument International contacts a policyholder/account holder for self-certification of their tax status and the request is not fulfilled, Monument International will be required to declare the surname, first name and date of birth of these policyholders/account holders to the Isle of Man Tax Authorities as we will not hold information to confirm they are not “reportable persons”.
Please note that we are not in a position to provide any tax advice and recommend that you contact your tax advisor for further information on the CRS and its possible implications for you.