Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2026 Update (June)

Determinations

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

n.a.

C

Ratings

LC

C

C

C

C

C

C

C

C

C

Recommendation (A.1, framework)

Where foreign companies are resident for tax purposes in the Isle of Man, rules should be in place to ensure the availability of legal ownership information of such companies.

Underlying factor

Recent amendments to the Isle of Man’s tax law requires foreign companies to include in their annual tax returns either a schedule of significant shareholders or the contact information of a person who is responsible for holding information on all owners. However, such provisions do not impose a complementary obligation on the nominated individual to hold such information. No offence is committed by the company or the nominated individual if such information is not held.

(see paragraphs 97 and 98 of Isle of Man’s 2017 Report for more information)

Summary of actions reported

Amendments in the tax law that came into force in October 2019 require the resident nominated officers of foreign companies to hold or obtain and provide legal ownership information on the foreign company. Sanctions have been included for failure by the company or the nominated individual to hold such information. In practice, foreign companies must update the contact details of the nominated officer in the tax return and confirm that they hold or can obtain and provide, if requested, legal ownership information of the foreign company.

Compliance actions have been taken for ensuring timely filing of tax returns.

Conclusion

Isle of Man appears to have taken appropriate actions to address the legal issue. Isle of Man has introduced legislative amendments that require the availability of legal ownership information of foreign companies that are resident for tax purposes in Isle of Man with their Isle of Man-resident nominated officer.

The implementation and enforcement in practice of these legislative amendments is yet to be fully ascertained. Therefore, Isle of Man is expected to report progress on the implementation of the changes in the legal and regulatory framework under a new recommendation: Isle of Man is recommended to monitor the effective implementation and enforcement of the legislative amendments introduced in October 2019 to ensure the availability of legal ownership information of foreign companies that are resident for tax purposes in Isle of Man in line with the standard.

Status determined

Existing recommendation: Considered provisionally addressed in the context of the monitoring process, subject to detailed validation

New recommendation issued.

Actions required

Existing recommendation: No immediate action required

New recommendation: In its next self-assessment, Isle of Man should –

• Report progress on the implementation of the changes in the legal and regulatory framework, including updated statistics on compliance with the obligation to nominate the resident officer responsible for the availability of legal ownership information, measures taken in case of failure, and information on whether checks are performed on the availability of information in practice.

Recommendation (A.1, framework)

Isle of Man is recommended to ensure that beneficial ownership information is available for all general partnerships.

Underlying factor

Although limited partnerships are required to engage an AML-obliged service provider, no comparable provisions exist in the Partnership Act to require general partnerships to engage an AML-obliged service provider. Further, general partnerships are not covered by the Beneficial Ownership Act 2017. However, beneficial ownership information will be available for natural persons or Manx corporate partners through the Isle of Man’s legal framework, so the gap pertains to beneficial ownership information for foreign corporate partners.

(see paragraphs 156 et seq. of Isle of Man’s 2017 Report for more information)

Summary of actions reported

Since June 2021, beneficial ownership information of foreign corporate partners of Manx general partnerships is available to the tax authorities. Foreign corporate partners of domestic general partnerships are required to file tax returns in the Isle of Man. As a result, tax authorities can require foreign companies to include such additional information (including beneficial ownership information) as is reasonably required for the administration or application of any provision of the Income Tax Act. In practice, beneficial ownership information is systematically sought in the tax return from all foreign companies, including foreign corporate partners of domestic partnerships that have Isle of Man-sourced income.

Conclusion

Isle of Man appears to have taken appropriate actions to address the legal issue by introducing beneficial ownership reporting requirements that cover foreign corporate partners of Manx general partnerships.

Isle of Man is expected to report progress on the implementation and enforcement of these changes under a new recommendation: Isle of Man is recommended to monitor the effective implementation and enforcement of the beneficial ownership reporting requirements introduced in June 2021 to ensure that adequate, accurate and up-to-date beneficial ownership information is available for all general partnerships in line with the standard.

Status determined

Existing recommendation: Considered provisionally addressed in the context of the monitoring process, subject to detailed validation

New recommendation issued

Actions required

Existing recommendation: No immediate action required

New recommendation: In its next self-assessment, Isle of Man should –

• Report progress on the implementation and enforcement of the changes in the legal and regulatory framework under the new recommendation.

• Provide statistics on the number of foreign corporate partners of domestic partnerships, number of foreign corporate partners that were required to include beneficial ownership information in the tax returns.

Recommendation (A.1, practice)

Isle of Man is recommended to monitor the implementation and supervision of beneficial ownership requirements recently introduced into its law.

Underlying factor

Whereas requirements to hold beneficial ownership information were not supervised in all cases over the review period, the Isle of Man passed the 2017 Beneficial Ownership Act, which envisions supervision by the financial regulator. However, as this law is recent, its effectiveness could not be tested in practice.

(see paragraphs 107 et seq. of Isle of Man’s 2017 Report for more information)

Summary of actions reported

In March 2020, procedural amendments have been brought in, which preclude the creation of a new entity without information being entered onto the beneficial ownership database. The Beneficial Ownership Act was amended in September 2021 to improve the accuracy of data recorded and the timeliness with which it is submitted to the database maintained by the Companies Registry. The beneficial owner declaration and any changes to the beneficial owner or nominated officers are now required to be submitted within 21 days to the Companies Registry. As on 31 December 2024, 96% of the domestic companies and 99% of the partnerships with legal personality had reported beneficial ownership information to the database. Actions are taken against defaulting entities.

The Companies Registry and the Financial Services Authority have conducted some supervisory activity.

Conclusion

Isle of Man has made progress to address the recommendation. Further information is required on the supervision activity undertaken by the Financial Services Authority, which is the designated supervisor for the beneficial ownership database. Moreover, as limited beneficial ownership information is required to be reported to the beneficial ownership database, information is required on the measures taken to verify the adequacy, accuracy and up-to-dateness of beneficial ownership information held by companies. Isle of Man should report further progress in its next self-assessment.

Status determined

In the process of being addressed

Actions required

In its next self-assessment, Isle of Man should –

• Provide complete information on supervision conducted by the Financial Services Authority regarding the information reported to the beneficial ownership database, including on the outcomes of the supervisory activity and the consequent enforcement measures taken.

• Provide information on the measures taken to ensure that adequate, accurate and up-to-date beneficial ownership information is held by companies and limited partnerships.

Recommendation (A.1, practice)

Isle of Man is recommended to monitor the effective implementation and enforcement of the legislative amendments introduced in October 2019 to ensure the availability of legal ownership information of foreign companies that are resident for tax purposes in Isle of Man in line with the standard.

Underlying factor

Isle of Man has introduced legislative amendments that require the availability of legal ownership information of foreign companies that are resident for tax purposes in the Isle of Man with their Isle of Man-resident nominated officer. The effective implementation in practice of these legislative amendments is yet to be ascertained.

Recommendation (A.1, practice)

Isle of Man is recommended to monitor the effective implementation and enforcement of the beneficial ownership reporting requirements introduced in June 2021 to ensure that adequate, accurate and up-to-date beneficial ownership information is available for all general partnerships in line with the standard.

Underlying factor

Isle of Man has introduced measures that allow tax authorities to seek beneficial ownership information from all foreign companies, including foreign corporate partners of domestic partnerships that have Isle of Man-sourced income. The effective implementation in practice of these legislative amendments is yet to be fully ascertained.