Isle of Man: Domestic Corporate Taxion
Calculation of Taxable Base
This page was last updated on 24 February 2020.
Companies in the Isle of Man are taxed from a year of assessment basis to an accounting period basis ‘pay and file’ system. For companies, income tax is normally assessed for income arising in the previous financial year.
Allowable expenditure needs to be incurred 'wholly and exclusively' for the business; however, mixed private/company expenses can often be apportioned.
The system of capital allowances follows that of the UK. However, there are 100% first year allowances for industrial buildings and for agricultural land and buildings. There are special rules for tourist development, leasing companies and shipping.
Loss relief, group relief and consortium relief are available, and broadly speaking follow the UK rules. The companies involved all need to be resident on the Isle of Man.
Foreign investment income is normally treated as 'franked'; but the rules are complex, particularly for the UK (and see the Double Taxation section).