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Isle of Man: Domestic Corporate Taxion

Introduction

In the Isle of Man there is no general capital gains tax, turnover tax or capital transfer tax, and there are no stamp duties. Apart from VAT, the only significant tax is income tax which is levied on 'persons', ie individuals or corporations (companies). The Assessor of Income Tax is the head of the Income Tax Division of the Manx Treasury and carries out the functions of tax assessment and collection. The Manx tax year runs from April 6th to April 5th (as in the UK).

In 2006, the jurisdiction moved towards a zero tax rate for all businesses, except companies holding banking licences and those receiving income from land and property in the Isle of Man (which includes rental income, extraction of minerals and property development). Prior to this change, companies in the insurance, fund management, space and satellite technology and shipping sectors enjoyed a zero rate of corporate tax (extended in 2005 to companies in the manufacturing, film, e-gaming, tourist accommodation, agriculture and fishing sectors).

The 0% tax regime is intended to stimulate inward investment by businesses establishing on the Island, and provide a consistent treatment across all sectors of the economy as part of the Isle of Man's commitment to a diversified economy. However, the future of the '0/10' system was subject to some uncertainty, having attracted the attentions of the European Union's Code of Conduct on Business Taxation (see below).

From January 4, 2011 the standard value-added tax (VAT) rate in the Isle of Man is 20%, in line with the UK. Previously, the rate was 17.5%.

A VAT rate cut, from 17.5% to 15%, entered into force on December 1, 2008. This was considered a temporary measure to buoy consumer consumption during the recession. The increased rate of 17.5% became effective again after midnight of December 31, 2009.

 

 

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