LOWTAX OFFSHORE

ISLE OF MAN: TAXATION

BACK TO ISLE OF MAN INFORMATION: BUSINESS, TAXATION AND OFFSHORE

In this Section:

- ISLE OF MAN DIRECT CORPORATE TAXATION
- ISLE OF MAN PERSONAL TAXATION
- ISLE OF MAN OFFSHORE TAXATION REGIMES
- ISLE OF MAN DOUBLE TAXATION TREATIES

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 at a maximum rate of 18% on individuals, and until 2006 on corporations (companies). In its budget for 2002/03 the government reduced lower rates of income tax to 10%.

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). The island forms part of the EU VAT area, and applies the same rate as the UK.

In February, 2005, Treasury Minister Allan Bell delivered his 2005 Budget, announcing a zero rate of income tax for six sectors of the Island's economy - manufacturing, film, e-gaming, tourist accommodation, agriculture and fishing.

Mr Bell confirmed that the Island - which already had the zero rate for insurance, fund management, space and satellite technology and shipping - would introduce it as a standard for business in April 2006, with a 10% rate of tax for 'financial institutions'. This includes 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).

The Isle of Man's 2006 budget in February, 2006, included a package of measures to further stimulate the inflow of investment and business to the Island, including the introduction of zero corporate tax as of April 5, 2006.

In July, 2004, the Income Tax (Amendment) Bill 2004 was signed, marking an important step towards the programme of changes under the island’s Taxation Strategy, whilst also helping the jurisdiction to meet its international commitments, said Treasury Minister Alan Bell.

The Act included measures to:

Extend the current year basis of assessment to all income received by individuals and other non-corporate taxpayers, including income from investments, self-employment and other sources. (Income from employment is already on a current year basis).
Introduce a payment on account system for those people who do not pay their annual income tax liability through the Income Tax Instalment Payment or Sub Contractor’s Deduction Schemes.
Allow more time to make a tax return and, after a period of education, introduce a late filing penalty system.
Provide the Assessor with additional powers to obtain information, including documents and information required to enable the Island to comply with its international commitments.
Prevent the avoidance of Manx tax through the use of company loans to take advantage of the differential between corporate and personal income tax rates.

"As I said when I introduced this Bill last year, the people of the Isle of Man are entitled to an income tax system that works as efficiently as possible and collects all the money that is owed to public funds,” Mr Bell continued, noting:

“Manx income tax rates are low compared with other countries and it is not unreasonable to expect payment of what is due. It is also important for the reputation and stability of the Island that we have the ability to honour our international commitments.”

- ISLE OF MAN FORMS OF OFFSHORE OPERATION
- ISLE OF MAN TAX TREATMENT OF OFFSHORE OPERATIONS
- ISLE OF MAN TAXATION OF FOREIGN EMPLOYEES OF OFFSHORE OPERATIONS
- ISLE OF MAN EXCHANGE CONTROL
- ISLE OF MAN OFFSHORE ACTIVITIES
- ISLE OF MAN EMPLOYMENT AND RESIDENCE

Isle of Man Double Taxation Treaties

- ISLE OF MAN DOUBLE TAX TREATIES
- ISLE OF MAN INTERNATIONAL AGREEMENTS

BACK TO ISLE OF MAN INFORMATION: BUSINESS, TAXATION AND OFFSHORE

ISLE OF MAN: TAXATION

Isle of Man Direct Corporate Taxation

Isle of Man Personal Taxation

Isle of Man Offshore Taxation Regimes

Isle of Man Double Taxation Treaties