IoM Announces Zero Taxation Rate For Space Industry

by Robin Pilgrim, LawAndTax-News.com, London

19 February 2004

Delivering the Isle of Man's budget on Tuesday, Treasury Minister, Allan Bell revealed that the government intends to extend a zero rate of corporate tax to businesses involved in the space and satellite industries.

The jurisdiction currently has a zero tax regime in place for a number of industries, including shipping, insurance and fund management, and plans to move towards a zero tax rate for all businesses by 2006.

However, Mr Bell explained that:

"I intend to extend the existing zero-rate to new opportunities as and when they arise. A small but exceedingly promising area is Space and Satellite Technology. This will encompass the manufacture, operation, sale or other activities provided in respect of launch vehicles, satellites or similar assets, including those educational and other training activities that are directly associated with the industry."

He continued:

"Companies involved in this high value added category, will from 6 April 2004 be included in the growing number of activities that already benefit from the zero rate band of tax. I am extremely hopeful that high technology businesses will look to the Isle of Man as their preferred location, and know that the Treasury and the Department of Trade and Industry are working to further develop relations with several multi-national companies."

"One such company that provides a range of global communications services via its network of satellites has already established a base on the Island. Such developments fit perfectly within our economic plans and are made possible by the new taxation strategy."

Other key developments unveiled in Tuesday's budget included:

• Income tax personal allowances increased by 2.8% to £8,225 for single persons and £16,450 for married couples;
• Personal income tax standard rate stays at 10%, with the higher rate remaining at 18%;
• Personal Allowances Credit maximum increased from £200 to £222.50 for individuals who do not fully utilise personal allowances;
• Income tax rate for non-resident companies’ trading income reduced to 10%;
• Company tax higher rate remains at 18% for non-trading income;
• Exempt Companies Fees to increase to £450.

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