Lowtax Network

Back To Top

Isle of Man: E-Commerce

Introduction

This page was last updated on 24 February 2020.

There is some competition between a number of offshore jurisdictions to offer the most advanced e-commerce environment to businesses seeking an offshore base for part or all of their operations. The Isle of Man is clearly one of the leading jurisdictions, being one of the first to enact e-commerce legislation and host an active e-commerce community.

The Isle of Man's advantages are an established base of professionals, liberal legislation, good telecommunications and the Ronaldsway Freeport.

Although the Isle of Man has been criticised for some of its offshore tax practices, it has managed to adjust its regime without unduly restricting offshore business operations, and, like Ireland, offers a secure and stable home to international businesses wanting to serve international markets. The problem for the island is that it is small, and inevitably has less depth in terms of infrastructure, skilled workers and support services.

In many countries, the distribution of goods from a warehousing facility does not constitute the carrying on of a trade or business in that jurisdiction, so that even for physical goods, in many cases it will be possible to avoid a permanent establishment (taxable presence) altogether in many high-tax jurisdictions where trading activities currently take place.

This section of the e-commerce site explores how businesses can optimise their tax structure by using the Isle of Man as a base while still keeping to sensible commercial principles of operation.

The Isle of Man has close to 100% broadband coverage, and the island is one of the most attractive high speed internet locations in Europe.

Like other offshore jurisdictions, the Isle of Man can take advantage of the natural connection between the internet and offshore stemming from the fact that both, of their nature, manage to avoid tax and the regulatory restrictions that tend to affect larger countries. Businesses which can operate on the internet without touching ground in a high-tax jurisdiction will naturally migrate to offshore jurisdictions. Those businesses that already have offshore existence will find it highly convenient to be able to use the internet to trade with their high-tax customers without having to make a landing in their countries.

By locating websites in the Isle of Man to carry out functions previously based in high-tax jurisdictions such as sales and marketing, treasury management, supply of financial services, and most of all, the supply of digital goods such as music, video, training, software etc, businesses can take advantage of low rates of taxation for increasingly substantial parts of their operation.

The Isle of Man has targeted betting and gaming among other offshore e-commerce sectors, with some success.
Furthermore, a world-class telecommunications infrastructure and the introduction of zero rate corporate tax will also help the island gain a competitive edge in the offshore e-gaming stakes.

Manx Telecom announced in September 2009 that it had been licensed as an approved e-gaming disaster recovery provider by the Isle of Man Gambling Supervision Commission.

The company’s involvement in e-gaming dates back to the earliest days of the sector, having hosted the first ever live e-Gaming sites to register with the Isle of Man Gambling Supervision Commission, in 2001. Since then, Manx Telecom has invested heavily in the island’s data centre and telecommunications infrastructure.

 

 

Back to Isle of Man Index »