Starting your own business is an exciting but overwhelming time for an entrepreneur, so we have put together some helpful information to guide prospective start-ups on the Isle of Man.
Introduction to VAT
The Isle of Man, by virtue of its unique Customs and Excise Agreement with the United Kingdom, is treated as part of the UK for Customs, Excise and Value Added Tax (VAT) purposes. The Value Added Tax Act 1996 governs VAT Legislation in the Isle of Man. For more information about VAT, please see our Introduction to VAT guide.
Please note: Is it compulsory to register for VAT if at the end of any month the total value of your taxable supplies you have made in the preceding 12 months, on a rolling 12-month basis, exceeds £85,000.
Reduced rate VAT for hospitality & attraction businesses
This guide has been prepared to provide businesses with further detail about the reduction of VAT in relation to hospitality (catering) admissions to certain attractions.
Corporate tax in the Isle of Man
The standard rate of corporate income tax in the Isle of Man is 0%.
A higher rate of 10% is applied to income received by:
· Banking businesses
· Retail businesses (that have taxable income of more than £500,000 from such business.
Further details may be found in Practice Note 181/13.
A higher rate of 20% is applied to income from land and property in the Isle of Man (including property development, residential and commercial rental or property letting and mining & quarrying).
*Certain companies subject to Manx income tax at the standard 0% rate can elect to pay tax at the 10% rate. Practice Note 134/06 sets out the criteria for making an election and the effect that the election will have on the company’s income tax responsibilities.
More information on Income Tax for Businesses and Corporations can be found here.