|Isle of Man||Back|
The Isle of Man is an internally self-governing dependent territory of the British Crown. It is not and has never been part of the United Kingdom but is within the British Isles. It is technically a Crown Dependency and is independent in all matters except foreign affairs and defence, both of which are the responsibility of the United Kingdom Government and for which the Isle of Man pays an annual contribution.
The Manx exercise their extensive political and legislative independence through their ancient parliament, Tynwald, which is the oldest legislature in the world in continuous existence.
Types of Company
Incorporated under the Companies Acts 1931- 2004
Companies may be:
Established under the Limited Liability Company (LLC) Act 1996
The Isle of Man adopted the Wyoming legislation as its model and enacted the Limited Liability Companies Act 1996. A LLC is a hybrid structure composing attributes of both a company and a partnership. Further specific information is available on request.
Previously the Isle of Man operated a company income tax system that permitted non-resident tax status, tax exemption and international tax status. To comply with commitments made to the EU and the OECD the Isle of Man adopted a strategy to change its corporate tax system and to remove these, so called “harmful tax practices”.
From the 6 April 2006, the general rate of corporate income tax in the Isle of Man is 0%. A 10% tax rate still applies in very limited circumstances, for companies engaged in banking business and IOM property transactions.
Distributions made to non-residents of the Isle of Man from companies taxed at 0% are subject to withholding tax at the rate of 0%.
VAT Registration and EU Trading
Although the Isle of Man is not a member of the EU, it has the distinct advantage of being part of the customs territory of the EU under Protocol 3. A company can register for VAT in the Isle of Man if it maintains a place of business in the Isle of Man. It is therefore possible for Isle of Man and foreign companies to make advantage of the Isle of Man 0% corporate tax rate whilst obtaining the benefits of VAT registration for trade in the EU.