HM Treasury’s review of the VAT treatment of imported aircraft and yachts in the Isle of Man has concluded that the law is being correctly implemented and administered in the Crown dependency, although it has recommended introduction of additional post-registration compliance procedures.
The Isle of Man invited HMT to carry out the review following allegations of widespread VAT avoidance made in the paradise papers leaks in November 2017. The review examined whether the rules enabled importation of private jets into the EU by high net worth individuals without paying the correct amount of VAT.
The report found that the Isle of Man government carries out ‘extensive and effective’ compliance checks during VAT registration but should implement further compliance checks in the years after registration to ensure that the right amount of VAT continues to be collected. The Isle of Man has already started to implement improved compliance procedures in light of these recommendations.
The report also noted that there may be merit in a wider review of these rules if EU member states and other jurisdictions deem that more tax should be collected on these activities. See bit.ly/2oV2q9S.
In 2018, the European Commission began infringement proceedings against the UK over the Isle of Man’s treatment of supplies and leasing of aircraft for private use.
HM Treasury’s review of the VAT treatment of imported aircraft and yachts in the Isle of Man has concluded that the law is being correctly implemented and administered in the Crown dependency, although it has recommended introduction of additional post-registration compliance procedures.
The Isle of Man invited HMT to carry out the review following allegations of widespread VAT avoidance made in the paradise papers leaks in November 2017. The review examined whether the rules enabled importation of private jets into the EU by high net worth individuals without paying the correct amount of VAT.
The report found that the Isle of Man government carries out ‘extensive and effective’ compliance checks during VAT registration but should implement further compliance checks in the years after registration to ensure that the right amount of VAT continues to be collected. The Isle of Man has already started to implement improved compliance procedures in light of these recommendations.
The report also noted that there may be merit in a wider review of these rules if EU member states and other jurisdictions deem that more tax should be collected on these activities. See bit.ly/2oV2q9S.
In 2018, the European Commission began infringement proceedings against the UK over the Isle of Man’s treatment of supplies and leasing of aircraft for private use.
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