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Isle of Man: Domestic Corporate Taxion

Withholding Tax

There are generally no withholding taxes on interest, dividend and royalty payments. Exceptions include interest payments made by financial institutions in the Isle of Man to residents of EU member states under the Savings Tax Directive. Until June 30, 2011 the withholding tax method applied. From July 1, 2011 the government switched to the automatic exchange of information. At the same time the rate increased from 20% to 35%. The Isle of Man applies a 20% withholding tax on royalties paid to individuals in jurisdictions which do not have a tax treaty with the Isle of Man.

Until 2006, companies had to deduct withholding tax (at 18%) from payments made to non-residents in respect of dividends, interest, profit shares and directors' remuneration. However, the Government offered a number of concessions which exempted various classes of payment from this requirement, including payments from a number of specified financial institutions including banks, authorised investment companies and some insurance companies.



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