On 10 January 2025, the IOM Income Tax Division (“ITD”) published a new guidance note, GN63, relating to upcoming changes to their AEOI compliance programme, and specifically the introduction of onsite visits. The purpose of the guidance note is to outline the ITD’s intended approach to onsite visits which will assist Financial Institutions (“FIs”) prepare for such a visit.
The aim of the AEOI compliance visits is to ensure that IOM entities are:
- Classifying themselves correctly for AEOI.
- Completing the required due diligence procedures.
- Undertaking complete and accurate reporting for AEOI.
From our review of the Guidance Note, the following points are worth noting:
- A compliance visit is likely to be triggered by a known or perceived risk identified by the ITD from the data reported, information gathered (such as through the compliance returns), and/or intelligence held.
- The ITD aim to give 12 weeks notice before a visit.
- Where an entity is an Investment Entity by virtue of being managed by another FI, the ITD may conduct onsite visits to the managing entity’s premises to assess both its compliance with the applicable CRS regulations and that of any entities it manages.
- Information will be requested from an FI prior to the visit to allow the ITD to prepare for the visit. Such information is expected to be requested no later than 6 weeks prior to the visit.
- A pre-meeting will be held between the FI and the ITD before the onsite visit to confirm the scope of the ITD review and allow any questions to be addressed from either side.
- After the onsite visit, a meeting will be held between the ITD and the FI to allow the ITD to provide an overview of their findings and detail any remediation required. The ITD will then compile their findings into a report to provide to the FI.
Other updates
Furthermore, the ITD announced the following as part of their January 2025 AEOI News Update, also published on 10 January 2025:
- Confirmation that the temporary relief relating to the collection and reporting of US TINs provided in the IRS Notice 2023-11 has been extended (see Notice 2024-78) to cover calendar years 2025, 2026, and 2027, including details of the procedures that FIs have to follow where no US TIN is held on a pre-existing account (to take effect from the 2025 reporting period, ie the reporting to be submitted by June 2026).
- The final reportable jurisdictions list for 2024.
- The provisional reportable jurisdictions list for 2025.
- An updated participating jurisdictions list.
KPMG comment
The introduction of onsite visits as part of the ITD’s AEOI compliance programme should come as no surprise to FIs in the Isle of Man, with many jurisdictions (including e.g. Jersey and Guernsey) having been conducting similar compliance reviews for a number of years. From a practical perspective, IOM FIs should take the opportunity to ensure that they have appropriate AEOI policies and procedures in place, together with robust documentation to support the filings undertaken in prior periods, so that they are able to respond accordingly to any such requests from the ITD.
KPMG has extensive experience across the Crown Dependencies in assisting FIs with AEOI audit readiness, including policies and procedures reviews, health-checks of prior period reports, data validation, and training of staff. If you have any questions relating to the ITD’s AEOI compliance programme or would like to discuss, please contact your usual KPMG contact or the team below.