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The Isle of Man is set to move to automatic exchange of information within the EU in its application of the EU savings tax directive.

The island will be the first offshore territory to adopt the legislation.

Treasury minister Allan Bell will announce the new tax policy today at the annual OECD forum in Paris. It will take effect from July 1 2011.

The move will mean the withholding tax option available to customers with Isle of Man bank accounts will be withdrawn.

"This is a signal to our trading partners and investors alike that we can continue to be relied upon and that our name is associated with probity and foresight," said Bell.

"We continue to lead the way in international tax cooperation and transparency."

The announcement follows comments earlier this month from John Spellman, director of Isle of Man Finance, who said the island would welcome "a level playing field" when it comes to automatic information exchange.

Since 2000, the Isle of Man has signed 14 tax information exchange agreements and one double taxation agreement.

The island was placed on the OECD's white list of compliant jurisdictions after the G20 summit in London in April where world leaders discussed tackling tax evasion globally.

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