Carthy to visit Isle of Man to investigate Paradise Papers tax revelations
Sinn Féin MEP Matt Carthy is due to participate in a fact-finding mission to the Isle of Man this week as part of a visit by the European Parliament’s special committee on financial crimes, tax evasion and tax avoidance (TAX3), which was set up in response to the Paradise Papers revelations.
Carthy said: “Last year’s massive data leak from the Appleby law firm exposed a massive tax avoidance scheme in the Isle of Man, in which the crown dependency allowed multinational corporations and ultra-rich individuals to avoid paying £790 million of VAT on more than 200 aircrafts and yachts that were imported to the EU since 2011.
“As always, law firms and one of the Big Four accountancy firms – in this case, Appleby and EY – devised the detail of this scheme for billionaires, which was facilitated by the Isle of Man’s government and customs agencies.
“This month the European Commission announced it was opening an infringement procedure against the Isle of Man, saying these tax breaks were illegal and citing widespread evasion of VAT in the aviation and yacht sectors.
“This week, I will be taking part in a fact-finding mission to the Isle of Man to investigate how this tax evasion scheme operated, and the action that has been taken since the Paradise Papers to bring it to an end.
“MEPs from across the political spectrum who are part of the TAX3 special committee on financial crimes, tax evasion and tax avoidance will take part in the visit, and we will meet with government representatives, officials from Treasury, finance and customs, and representatives from the Isle of Man’s financial intelligence unit, among others.
“Another issue I want to focus during my visit is the revelation made by Christian Aid last year that LinkedIn, now owned by Microsoft, has used an Irish-registered subsidiary in the Isle of Man to avoiding paying tax in the Irish state. LinkedIn has done this by transferring 25% of its turnover to the Isle of Man subsidiary as intellectual property royalties, thus reducing its Irish profit margin to the point where for the years examined it paid no tax in Ireland whatsoever. The Isle of Man has a corporate tax rate of zero, so the subsidiary that receives the royalties also pays no tax.” ENDS
Note to editors:
The TAX3 mission to the Isle of Man will take place on November 22 and 23