Isle of Man Finance

The European Savings Tax Directive is an agreement between the Member States of the European Union (EU) to automatically exchange information with each other about customers who earn savings income in one EU Member State but reside in another. Three EU Member States (Austria, Belgium and Luxembourg) have opted to apply alternative arrangements, the retention or withholding tax option.

Tax is deducted at source from income earned by EU resident individuals on savings held in other EU countries. The Isle of Man decided to apply the withholding tax option which means that tax is automatically deducted at source from interest earned on savings at a current rate of 15%, rising to 20% in July 2008.

Only EU residents will be included in the Directive but alternatively clients may choose to opt for disclosure of their interest payments and not have the withholding tax applied.

Please see the Guide to the European Savings Tax Directive for more detailed information. Clients should always seek professional advice regarding their tax matters.