Manx Government Readies Corporate Tax Reform Proposals

by Jason Gorringe, Tax-News.com, London

09 January 2006

The Isle of Man Treasury will in the coming weeks table detailed new legislative proposals dealing with important tax reforms which are taking place as part of the Manx’s government’s commitments under the EU Code of Conduct for Business Taxation.

The new measures are being introduced as part of a general reform designed to remove what the EU considers are the harmful elements of the jurisdiction's' corporate tax system. The principal parts of these reforms will be a 0% rate of tax for most companies and 10% for a defined sector.

A new Bill to be introduced in the House of Keys before the end of this financial year (5 April 2006) will, amongst other things, repeal the tax legislation relating to International Business Companies, Non-resident Company Duty, Exempt Companies, Exempt Insurance Companies and Exempt Managed Banks.

The intention is, subject to completing the legislative process, that these repeals will have effect from 6 April 2007.

However, the authorities will cease to accept new applications for Tax Exempt Company status from 6 April 2006.

Commenting on these changes, Treasury Minister Allan Bell observed that:

“First and foremost the Isle of Man Government wishes to provide businesses with a fiscal environment that provides stability and that enables them to grow."

Mr Bell added that:

"We are now in the final stages of implementing a taxation strategy that delivers both factors. At the same time we will fulfil our international commitments; further enhancing our reputation for competitiveness coupled with responsibility.”

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