The Tax Information Exchange Agreement (Taxes on Income) (Isle of Man) Order 2005

PART II Exchange of Notes

Note from Her Majesty’s Government

Dear Mr Corkhill,

I have the honour to refer to the texts of respectively the “Proposed Model Agreement between each of Guernsey, Isle of Man, and Jersey and each individual EU Member State that is to apply automatic exchange of information” and the “Proposed Model Agreement between each of Guernsey, Isle of Man, and Jersey and each individual EU Member State that is to apply the withholding tax in the transitional period”, that resulted from the negotiations with the Island Authorities on a Savings Tax Agreement, and that were annexed, respectively as Annex I and Annex II, to the Outcome of Proceedings of the High Level Working Party of the Council of Ministers of the European Union of 12 March (Doc. 7408/04 FISC 58).

In view of the above mentioned agreed texts, and respecting the constitutional relationship between the United Kingdom of Great Britain and Northern Ireland and the Isle of Man, I have the honour

• to propose to you the agreements as contained in the “Agreement on the taxation of savings income” at Appendix 1 to this letter;

• to propose that the said agreements may come into effect on 1 January 2005, or the date of application of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, whichever is later subject to the notification to each other that internal constitutional formalities for the coming into effect of these agreements are completed;

• to propose our mutual commitment to comply at the earliest date with our said internal constitutional formalities and to notify each other without delay through the formal channels when such formalities are completed.

I have the honour to propose that, if the above is acceptable to the Government of the Isle of Man, this letter together with its Appendix 1 and your confirmation shall together constitute our mutual acceptance and making of the agreements between the United Kingdom of Great Britain and Northern Ireland and the Isle of Man.

Please accept, Sir, the assurance of our highest consideration,

Falconer of Thoroton, C

Note from the Government of the Isle of Man

Dear Lord Falconer,

I have the honour to acknowledge receipt of your letter of 18 May 2004, which reads as follows:

“I have the honour to refer to the texts of respectively the “Proposed Model Agreement between each of Guernsey, Isle of Man, and Jersey and each individual EU Member State that is to apply automatic exchange of information” and the “Proposed Model Agreement between each of Guernsey, Isle of Man, and Jersey and each individual EU Member State that is to apply the withholding tax in the transitional period”, that resulted from the negotiations with the Island Authorities on a Savings Tax Agreement, and that were annexed, respectively as Annex I and Annex II, to the Outcome of Proceedings of the High Level Working Party of the Council of Ministers of the European Union of 12 March (Doc.7408/04 FISC 58).

In view of the above mentioned agreed texts, and respecting the constitutional relationship between the United Kingdom of Great Britain and Northern Ireland and the Isle of Man, I have the honour

• to propose to you the agreements as contained in the “Agreement on the taxation of savings income” at Appendix 1 to this letter;

• to propose that the said agreements may come into effect on 1 January 2005, or the date of application of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, whichever is later subject to the notification to each other that internal constitutional formalities for the coming into effect of these agreements are completed;

• to propose our mutual commitment to comply at the earliest date with our said internal constitutional formalities and to notify each other without delay through the formal channels when such formalities are completed.

I have the honour to propose that, if the above is acceptable to the Government of the Isle of Man, this letter together with its Appendix 1 and your confirmation shall together constitute our mutual acceptance and making of the agreements between the United Kingdom of Great Britain and Northern Ireland and the Isle of Man.

Please accept, Sir, the assurance of our highest consideration,”

I am able to confirm that the Isle of Man has agreed to make Bilateral Agreements with each EU Member State and that this letter constitutes our mutual acceptance and making of the “Agreement on the Taxation of Savings Income between the Isle of Man and the United Kingdom of Great Britain and Northern Ireland” as set out in Appendix 1 of your letter dated 18 May 2004 and appended to this letter.

I shall notify you directly once our constitutional formalities are completed.

Yours sincerely

R.K. Corkhill

Chief Minister