Isle Of Man's Zero Tax Proposals Endorsed By Tynwald

by Amanda Banks, Tax-News.com, London

23 October 2002

The Isle of Man Online news service reported this week that the Manx Treasury's zero corporate tax proposals have been accepted by the Tynwald.

In addition to introducing a zero rate of corporate tax for all companies based on the Island (with the exception of banks and building societies), the recently endorsed measures will do away with 'harmful' tax measures such as exempt companies and non-resident company duty, in response to the European Union's code of conduct on business taxation.

Speaking to the Isle of Man Online, Treasury Minister, Allan Bell explained that: 'The Treasury has spent a long time looking into every way the Island can secure its long-term economic status in line with the EU and the OECD.'

'The best option we were left with was a reduction in tax values, retaining a 10% standard rate for banks and building societies and a 0% rate for all other business opportunities.'

Critics of the plans have warned that reducing the jurisdiction's corporate tax rate to zero will deprive the government of some £23 million in revenue. However, suggesting that any shortfall will likely be recouped as a result of more businesses choosing to locate in the Isle of Man, Mr Bell observed that: 'The overall effects of not doing anything will be far greater in the long run than £23 million.'

The Treasury Minister plans to introduce the new measures over the next four budgets, in order to comply with the EU deadline of January 1, 2006, according to the local news service.

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