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Isle of Man: Personal Taxation

Customs Duties

There are no customs barriers between the United Kingdom and the Isle of Man. For the purposes of trade and VAT in the European Union the two countries form a single area. The Isle of Man has undertaken by agreement to keep its VAT and customs and excise duties provisions in line with those of the United Kingdom. VAT is currently levied at a rate of 20% (17.5% prior to 2011). A lower rate of 8% applies to domestic fuel. A further reduction of 5% applies to holiday accommodation, excluding time-share.

The Isle of Man's VAT and customs and excise duties are collected together with those of the United Kingdom. The proceeds are then shared between the two countries according to an agreed formula, based on their respective populations. In terms of Protocol 3 of the United Kingdom Act of Accession of the Treaty of Rome, the Isle of Man enjoys free trade with member states of the European Union but makes no payments to the union and receives no grants from it.

In November 2009, the Isle of Man government published the text of the revised revenue sharing agreement with the UK entered into force from the fiscal year 2010/11.

The revised agreement – which covers Value-Added Tax, duties on tobacco and alcohol, customs duties, anti-dumping duties, agricultural duties, and duties on pool betting – reduces the Isle of Man government’s revenue by GBP75million annually.

According to the UK government, the decision to amend the agreement was taken in light of growing UK debt, and because the arrangement was outdated.

As regards external trade the Isle of Man applies the common external tariff of the EU.



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