Last modified: 27/01/2025 12:32

Corporate taxation

	Rate
Corporate income tax rate (note 1)	0%/10%/15%/20%
Branch tax rate	0
Capital gains tax rate	0

1. Standard company tax rate 0%, except banking business 10%, land and property from Isle of Man sources 20%, retail businesses with profits in excess of £500,000 10%. For 2024/25 only, banking businesses and retail businesses with profits in excess of £500,000 will be subject to 15% tax. From 6 April 2024, there is a new rate of corporate tax of 20% on petroleum extraction activities or rights.

Residence: A company is resident in the Isle of Man when it is registered with Isle of Man Companies Registry with its registered office in the Isle of Man. A company registered in a jurisdiction outside the Isle of Man should register with Isle of Man Companies Registry if they have a place of business in the island or own land or property in the island.

Basis: Resident companies are taxed on their worldwide income according to the company’s financial year end.

Taxable income: An Isle of Man registered company’s worldwide income is taxable in the Isle of Man at the standard rate of 0% except for banking businesses and retail businesses with profits in excess of £500,000 in the Isle of Man which is taxed at 10% (15% for 2024/25 only) and profits from land and property situated in the Isle of Man and petroleum extraction activities or rights which is taxed at 20%. A foreign company is taxed on its Isle of Man source income at the same rates as above. Double tax relief will be given in accordance with double taxation agreements in place between the Isle of Man and the other jurisdiction.

Significant local taxes on income: None

Alternative minimum tax: None

Taxation of dividends: Dividends received by a company are taxable as income

Capital gains: None

Losses: Trading losses can be carried forward against future trading profits or carried back against prior period profits. Trading loss can be used against other income so long as it is taxable at same rate. Trading losses can be surrendered to other group companies which are a member of the same group for tax purposes.

Foreign tax relief: Subject to double tax agreement with the other jurisdiction

Participation exemption: None

Holding-company regime: None

Tax-based incentives: None

Group relief/fiscal unity: Group loss relief is available – see Losses above.

Small company/alternative tax regimes: None

Corporate taxation: compliance

Tax year: Company’s financial year end but must not be longer than 12 months.

Consolidated returns: No

Filing and payment: Tax return is due for filing within 12 months and 1 day following the financial year end with payment due within the same timeframe.

Penalties: Yes, for late filing of return and for late payment

Rulings: Rulings can be requested from Isle of Man Treasury

Taxation of individuals

	Rate
	Federal Income Tax
Standard rate	10
Higher rate	22

1. For tax year 2024/25, the standard rate applies to income above the personal allowance of £14,500 up to £21,000. The higher rate applies to income over £21,000. 
2. The bands are doubled for jointly assessed couples.
3. The personal allowance is reduced by £1 for every £2 that income exceeds £100,000.
4. A taxpayer can elect to enter a tax cap for a minimum 5 years and maximum of 10 years. The tax cap is currently set at £200,000 tax payable per year.

Residence: A person is considered Isle of Man tax resident once they decide to make the island their permanent home. A person can also be considered Isle of Man tax resident if they have spent 183 days or more on the island in a tax year.

Basis: Resident individuals are taxed on their worldwide income received in the tax year, which ends on 5th April.

Taxable income: All income from worldwide sources is taxable in the Isle of Man on tax resident individuals. Non-residents are taxable in the Isle of Man only on Isle of Man source income. Double tax relief is available in accordance with double tax agreements in place.

Capital gains: Not taxable

Deductions and allowances: Deductions can be given for mortgage & loan interest (restricted to relief at 10%), nursing expenses, charitable donations and private medical expenses subject to capped limits.

Foreign tax relief: Subject to double tax agreement in place.

Taxation of individuals: compliance

Tax year: 5th April

Filing and payment: Tax return is due for filing by 6th October following the end of the tax year. Tax payment is due by 6th January following the tax year, or 30 days from issue of the assessment if later.

Penalties: £100 for late filing of return and a further £200 penalty if not filed with 12 months of the issue of the return.

Rulings: Rulings can be requested from Isle of Man Treasury

Withholding taxes

Type of Payment	Resident recipients		Non-residents recipients
	Company	Individual	Company	Individual
	Rate (%)	Rate (%)	Rate (%)	Rate (%)
Rent & other income (1) except:	0	0	20%	22%
Directors fees	0	0	0%	0%
Dividends	0	0	0%	0%
Loan interest (2)	0	0	0%	22%

1. Withholding tax at 20% only applies to a non-resident recipient company on rental income, not on other income.
2. Loan interest withholding tax rate is 0% except when paid by an Isle of Man company in receipt of income from Isle of Man land & property.

Branch remittance tax: None

Anti-avoidance legislation

Transfer pricing: Yes, transactions should be carried out at arms length.

Interest restriction: Not subject to arm’s length test

Controlled foreign companies: n/a

Hybrid mismatches: n/a

Disclosure requirements: The Isle of Man requires companies to declare if they are a constituent entity of a MNE group under CbCR as required under the OECD Base Erosion and Profit Shifting standard. Companies are also required to demonstrate that they have adequate substance in the Isle of Man by providing information with their annual tax return.

Exit taxes: None

General anti-avoidance rule: In addition to the CbCR compliance for companies (see above) the Isle of Man has anti-avoidance rules in place with respect to indirect taxes.

Digital services tax and Other significant anti-avoidance legislation: None

Value-added tax/Goods and services tax

Type of tax: The Isle of Man has a unique Customs and Excise Agreement with the United Kingdom and so is treated as part of the UK for VAT purposes. Value added tax is charged on many good and services, although some are at a reduced rate or zero rate.

Standard rate: 20%

Reduced rates: 5% on, for instance, domestic property repairs and home energy

Registration: Annual taxable turnover of £90,000 or above, voluntary registration is possible below this level.

Filing and payment: Usually quarterly return and payment but can be monthly or annually in certain circumstances.

Social security contributions

	Employer	Employee
	Rate (%)	Rate (%)
Class 1 NIC primary rate	12.8	11
Class 1 NIC above UEL	0	1

Self-employed

Class 2 NIC £6.20 per week (2024/25) Class 4 NIC above lower profits limit (currently £8,320 for 2024/25) 8% Class 4 NIC above upper earnings limit (currently £48,776 for 2024/25) 1%

Other taxes

Capital duty: None

Immovable property taxes: None

Transfer tax: None

Stamp duty: None

Net wealth/worth tax: None

Inheritance/gift taxes: None

Other: None

Tax treaties

The Isle of Man has signed double taxation agreements and tax information exchange agreements with many other jurisdictions. Details can be found at the Isle of Man government website: https://www.gov.im/categories/tax-vat-and-your-money/income-tax-and-national-insurance/international-agreements/all-agreements/#accordion