(IoM Today) -- It comes in the wake of the Paradise Papers expose.
The new taxes special committee, agreed by the European Parliament last week, will have a remit to investigate harmful tax practices.
It will assess how European Union VAT rules were ’circumvented in the framework of the Paradise Papers’ and the impact of tax avoidance and evasion on developing countries, with ’particular attention’ given to the Crown Dependencies and Overseas Territories.
In December, the Isle of Man avoided being placed on a European Union blacklist after giving a commitment to make changes.
But we were among 40 jurisdictions deemed non-compliant to appear on a grey list and have been given one year to comply with tax good governance - or face being blacklisted.
We were accused of failing to comply with standards of fair taxation and specifically having a tax regime that ’facilitate offshore structures which attract profits without real economic activity’.
The special committee will have 45 members and will have a 12 month term of office.
Treatment of VAT on corporate jets imported into the EU via the Isle of Man was among the allegations that surfaced out of the Paradise Papers investigation.
A Freedom of Information request last year showed almost £800 million has been refunded in VAT on aircraft imports since 2011.
But the Manx Government say they have found no evidence of wrong-doing and pointed out we follow the same policy, rules and laws as the UK for VAT treatment of importation of aircraft into the EU.
UK Treasury was invited to conduct a review into the Isle of Man’s administration of VAT in relation to aircraft and yachts.
It aims to complete that review in the spring.
Law firm Appleby is suing the BBC and the Guardian over their Paradise Papers coverage.
It alleges the confidential information was obtained illegally following its server being hacked between November 2015 and May 2016. Several million documents going back to the 1950s were handed to a German newspaper and subsequently made available to the International Consortium of Investigative Journalists.
In November the OECD gave the Isle of Man a fully compliant rating for tax transparency, making us one of only three countries so far to be given the top rating in both the first and second round of reviews.