Isle of Man: Country and Foreign Investment
Relationship with the EU
This page was last updated on 15 January 2020.
The Isle of Man is not part of the EU. Protocol No 3 of the UK's Treaty of Accession to the EEC (now the EU) excludes the island from most of the effects of the treaty, other than those concerning trade in goods.
There is free movement of industrial and agricultural goods between the island and the UK and between the island and EU and EEA countries. The island applies the external common customs tariff of the EU.
The Isle of Man chose to become part of the EU's VAT regime, but is not part of the EU fiscal area in any other respects. The island's VAT scheme is largely similar to that of the UK. For some types of business activity inside the EU it is an advantage to be within the scope of VAT.
The Isle of Man’s constitutional position in relation to the EU cannot be changed without unanimous agreement of the member states, including of course the UK. The island sees its current relationship with the EU as beneficial, and does not seek to change it.
Of course, if Britain leaves the EU, things will change. Protocol 3 will cease to have any effect, meaning that goods exported from Isle of Man to EU countries will possibly be subjected to tariffs, though the Manx government will attempt to retain the current arrangement. In any case, as services are not within the scope of Protocol 3, they will be unaffected. Trade in goods within the Common Travel Area (the UK, Ireland, Isle of Man and Channel Islands) will also not be affected.