The Isle of Man Government has invited HM Treasury to conduct an assessment of the practice for the importation of business jets into the EU through the Isle of Man, with a focus on the VAT treatment of aircraft leasing arrangements.
The assessment by HM Treasury is being instigated as a result of allegations of abusive VAT avoidance made by media associated with the International Consortium of Investigative Journalists (ICIJ). It will supplement a review already underway by the Isle of Man Treasury, Customs & Excise Division.
Chief Minister Howard Quayle MHK said:
‘The VAT treatment of the importation of aircraft into the EU is a highly technical and complex area in which the Isle of Man follows the same policy, laws and rules as the United Kingdom. The Isle of Man Government works closely with HMRC and holds quarterly governance meetings on a range of VAT issues. In light of the claims made by the ICIJ, we have asked HM Treasury to look at all elements involved in the process of the importation of business jets via the Isle of Man into the EU.’
‘The Isle of Man is a well-regulated country with a proud reputation for world-class service and compliance with international standards on tax and transparency. Like all responsible members of the global community, we take allegations of this nature extremely seriously. The ICIJ has so far rejected our repeated requests to provide written evidence to support their claims. During the course of our own ongoing review, we have found no evidence of wrongdoing or reason to believe that our Customs and Excise has been involved in the mistaken refunding of VAT.’
Treasury Minister Alfred Cannan MHK commented:
‘The assessment by HM Treasury announced today further demonstrates that the Isle of Man is committed to protecting its reputation as a leading international business centre. The Isle of Man is not a place that welcomes those seeking to evade or abusively avoid taxes.'
The scope of the assessment by HM Treasury will be defined and published in November, with the work being completed in 2018.
The Isle of Man Treasury's Customs & Excise Division is already conducting a review of VAT registered businesses in the aircraft import and leasing sector. That review started in October 2016 and is aimed at testing the accuracy and efficacy of declarations made to it by those businesses.
Of approximately 262 live VAT registrations in the sector, Isle of Man Customs and Excise has conducted 33 audits to date and a further 13 audits are currently under way.
Since 2011, Isle of Man Customs & Excise has raised more than 30 assessments for under-declared or over-claimed VAT against businesses in the aircraft leasing sector, protecting approximately £4.7million of VAT.'
The Isle of Man Government is not in a position to share taxpayer information with the public. Taxpayer information is held in confidence and that confidentiality is underpinned by law.
For further information contact:
Head of Corporate Communications
Isle of Man Government
Tel: 01624 685284; Mobile: 07624 369957
Tel: +442072943605 / +447765567842
Tel: +442072943617 / +447979692287