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IOM Allowed To Retain Building VAT Concession

by Amanda Banks, Tax-News.com, London

21 December 2010


Treasury Minister, Anne Craine has welcomed the announcement on December 16, following negotiations with the United Kingdom, that the island is to be allowed to retain its experimental reduced Value-Added Tax rate of 5% on the repair and refurbishment of domestic property on a permanent basis. The measure was due to expire at the end of the calendar year.

Welcoming the decision, Craine said:

“I am delighted that I can now remove any uncertainty associated with this matter. We believe that the retention of this rate of tax will continue to be a stimulus for the local building trade in these difficult times.”

For his part, the Collector of Customs and Excise, Denis Maxwell, added:

“There is no doubt that the reduced rate for domestic repairs has achieved what it set out to do, namely reduce activity in the shadow economy and encourage employment. We therefore welcome the United Kingdom’s agreement to make the rate a continuing feature of the island’s indirect taxation system.”

While the Isle of Man has fiscal autonomy from the United Kingdom, under a revenue sharing agreement with the United Kingdom, signed between the two governments in 1996, and revised in 2009, the two territories agreed to maintain broadly equivalent regimes. In the case of the Isle of Man this relationship is primarily legislated for under the Value-Added Tax Regulations 1996, and their subsequent amendments.

TAGS: individuals | Isle of Man | tax | business | value added tax (VAT) | fiscal policy | real-estate | United Kingdom | tax rates | tax breaks

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