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Isle of Man Tax Rates - Everything You Need to Know

The Isle of Man is a self-governing British Crown Dependency located in the middle of the Irish Sea. With almost no unemployment, a low crime rate and a strong community spirit, the island has emerged as a leading international business centre known for innovation and committed engagement with international standards and long-standing policies.

Why Choose the Isle of Man as Your Business Location?

  • Independent and favourable taxation
  • Political stability and a robust financial base
  • Highly skilled financial professionals

The Isle of Man has an excellent track record of supporting the entrepreneurial spirit with a government that encourages businesses to flourish and develop strong partnerships with the private sector. It builds upon the island’s existing creativity, connections and expertise to provide a solid foundation for new and existing companies to prosper. The island is home to a wide range of industries including; financial services, aircraft management, manufacturing, e-gaming, film production, precision engineering technical facilities and shipping.

The physical infrastructure and strong transport links enable businesses to operate and deliver to their worldwide customer base. International investors and businesses can feel confident they are doing business in a forward-thinking and well-regulated international business centre. However, as we know, there are tax implications for everything we do in today's world! The decisions you make today will often affect your tax burden in the future. It is crucial therefore to familiarize yourself with the various applicable taxes and their implications when doing business in the Isle of Man.


What are the most distinctive features of taxation in the Isle of Man?

  • Income tax for individuals capped at 20%
  • Income tax for companies 0% (for most businesses)
  • No death, inheritance, or estate duty
  • No capital transfer or gift tax
  • No capital gains tax
  • No wealth tax or similar capital levy
The country provides a straightforward tax structure to encourage more people to startup businesses and grow. Here are some taxes you need to be aware of before starting a business on the Isle of Man:
  • Value Added Tax
  • Corporate tax
  • Income tax
  • Property tax

Value Added Tax (VAT) in the Isle of Man

VAT is a transaction-based tax that is applied to the domestic supply of most goods and services and is currently charged at a standard rate of 20%. Other rates apply, like 0% on food, publications, books and public transport and 5% on domestic property repairs. Financial services, insurance, education and health care are all exempt from VAT. The Isle of Man is in a Customs Union with the United Kingdom (UK). This means that VAT is charged on supply transactions between the Isle of Man and UK businesses as if they were domestic supplies. The Isle of Man has its own Customs & Excise Authority.

Corporate taxes for business

Companies resident in the Isle of Man are taxed on their worldwide taxable profits that are calculated in line with local legislation. Companies are required to file an annual income tax return.

A non-resident company incorporated outside the Isle of Man but having a permanent establishment or place of business in the Isle of Man will be taxed only on the profit attributable to the Isle of Man establishment.

There are three rates of Corporate Income Tax:
The 10% rate applies to income from:
  • A banking business operating in the Isle of Man based on a deposit-taking license issued by the Isle of Man Financial Services Authority, and
  • Retail activities carried on in the Isle of Man. However, it is applicable only if that profit exceeds GBP 500,000 in the year.

The 20% rate applies to income derived from real estate in the Isle of Man.

The 0% rate applies to all other income.1   

The same tax rate applies to residents and non-resident companies. However, unilateral relief from double taxation in respect of foreign source income is given by way of a tax credit. In cases where a company is a resident in a country with which the Isle of Man has a tax treaty, then the Double Tax Agreement (’ DTA’) will come into play to determine residence.

It is important to note that a company that is incorporated in the Isle of Man will not be resident if it can prove to the satisfaction of the Assessor that:
  • Its business is centrally managed and controlled in another country,
  • It is resident for tax purposes under the other country's law,
  • There is a bona fide commercial reason for its residence status in the other country, and it is not motivated by a desire to reduce the Isle of Man tax.

Individual Income tax Rates

Income tax rates in the Isle of Man are as follows:

Standard rate 10%
Single person standard rate band £6500
Jointly Assessed couple standard rate band £13000
Higher rate 20%
Non-resident rate 20%
Single person Tax Cap £200,000
Jointly Assessed Couple Tax Cap £400,000
Single allowance £14500
Additional personal allowance* £6400
Blind / Disabled persons £2900
Age allowance** 0
Non-resident allowance** 0
Mortgage and Loan Interest limit*** £5000
BIK****exemption (not car benefit) £600
Nursing expenses limit £12500
Charitable Donations £7000
Private medical insurance limit £1800
Homestay (TT fortnight only) N/A
TT Homestay Allowance £2350

For non-residents in the Isle of Man, the income tax is 20%

Important note:
* Single parent additional allowance
** Age allowance was available to Isle of Man residents who are 65 or over at the start of the tax year
*** Mortgage and Loan Interest limit is for a single person, limit is doubled for a jointly assessed couple
**** Benefit in kind

Property tax in the Isle of Man

There are no property-related taxes for companies other than the following: 2:

(i) Income tax payable at a rate of 20% on profits from the rental or development of land or property situated in the Isle of Man; and 
(ii) Business rates as detailed for corporate taxes. 
The Isle of Man Government grants for business
The Isle of Man provides a highly supportive eco-system that is conducive to business growth. It is excellent for people looking to start, grow or relocate their business. The Department for Enterprise promotes a range of schemes from grant, loan and equity investments for the following:  
  • Business mentoring and financial support for individuals looking to take their first steps into self-employment,
  • Businesses looking for funds to scale up and grow, and
  • For those looking to invest in their business through development and improvement projects.
The taxation system in the Isle of Man is well defined and well structured. However, the way your business addresses the risk of non-compliance with these taxation laws can significantly impact its existence in this dynamic and evolving environment. This is where Moore Dixon can help. Whatever the task, we have the required skills in-house to provide the highest level of service and experience from our experts in VAT, compliance, consultancy, and cost-effective planning. We help ensure that you are not only aware of the applicable laws but that you achieve maximum tax efficiency in the short and long term. Contact us and let us walk you through our products and services.

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