Taxation

Taxation Details for the Isle of Man

The Isle of Man is a well known low tax area offering low or zero rates of direct taxation for individuals and companies. It is also an award winning well regulated offshore financial services centre.

The Isle of Man relies upon a small number of taxes, namely: income tax, national insurance (a social security tax), rates (a form of property tax) and VAT (value added tax).

The Isle of Man does not have any capital gains tax, wealth tax or inheritance tax.

Individuals

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Income tax is levied at a rate of 10% on the first £10,500 of taxable income and 20% on the rest. Individuals receive a £9,300 personal allowance. Married couples are taxed jointly and receive a personal allowance of £18,600, pay 10% on the first £21,000 of taxable income and 20% on the rest.

National Insurance is a form of social security taxation. It is levied on employment income at a slightly lower rate than the UK. For employees the rate is 11% on income between £109 and £784 per week. Various other rates are levied on the self employed etc.

Rates are a form of property tax and are based on a notional house value multiplied by some number set by the local authority. They are the primary source of income for local councils.

VAT is charged at 20% on the value of an item. Prices displayed in shops already include this tax. There are some variations, most notably the 5% rate for the supply of hotel accommodation and renovation and repair of dwellings, but generally the tax is applied in a similar manner to the UK.

Companies

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Since April 2006 most trading companies have paid income tax at 0% on their profits. Banks and retail businesses pay income tax at 10%.

Most companies with a turnover of £70,000 or more are required to register for VAT. The Isle of Man VAT regime is controlled by the Isle of Man's own Customs and Excise department. The Isle of Man is the only offshore centre in the EU VAT regime. VAT is charged at 17.5% on most sales.

The main employment tax is National Insurance and is levied at a rate of 12.8% on earnings above £109 per week.

The Isle of Man introduced legislation aimed at personal service companies in 2013.

Publications Tolley's Taxation in the Channel Islands and the Isle of Man Guernsey BGL Reads Ltd, Isle Of Man BW Group, PricewaterhouseCoopers Tolley Publishing, Paperback, September, 2003 ISBN: 0754521893 List Price: £59.95 New Price: £61.94 Third Party Price: £49.99 Buy Now More Info Tolley's Taxation in the Channel Islands and the Isle of Man PricewaterhouseCoopers Tolley Publishing, Paperback, September, 2002 ISBN: 0754516709 List Price: £59.00 Buy Now More Info