IoM, UK Agree New VAT Sharing Arrangement
by Jason Gorringe, Lowtax.net, London
16 March, 2016
The Isle of Man and the United Kingdom have agreed a revision of the formula that governs the sharing of joint indirect tax revenues under the 1979 Customs & Excise Agreement.
The new arrangement was signed in London on March 2, 2016, by the Isle of Man's Minister for the Treasury, Eddie Teare, and the UK's Financial Secretary to the Treasury, David Gauke.
Teare said: "The new formula, which is largely based around final expenditure by households, is intended to give the Isle of Man the revenue due to it from the consumption of goods and services in the island whether purchased on or off the island, including via the internet."
He said that both the Isle of Man and the UK governments believe that the new formula provides a stable and secure basis for the long-term future of the Customs and Excise Agreement between the United Kingdom and the Isle of Man.
A separate stand-alone document describing how the new Final Expenditure Revenue Sharing Arrangement (FERSA) will work in practice is to be produced by the Isle of Man Treasury, which, once agreed with HM Treasury, will be made public.
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