Isle of Man

Trading losses and excess capital allowances may be surrendered (subject to certain restrictions) between 75% affiliates resident in the Isle of Man. Similar concessions are available to members of a consortium, but only a fraction of the loss or excess may be set-off, that fraction being equal to the members’ share in the consortium in the relevant year of assessment.

Transfer pricing

There is no formal transfer pricing regime in the Isle of Man. If, however, the Assessor of Income Tax is of the opinion that the main purpose, or one of the main purposes, of any transaction is the avoidance or reduction of tax liability, assessments may be made to counteract that avoidance or reduction of tax liability.

Country-by-Country Reporting (CbCR)

The Isle of Man has implemented legislation to enact CbCR. CbCR is one of four minimum standards under the OECD Base Erosion and Profit Shifting (BEPS) project that aims to improve transparency between multinational businesses and tax authorities, and to help identify aggressive tax avoidance. The Isle of Man CbCR Regulations set out matters including the definition of certain terms, filing and notification obligations, and the format for CbCR.

Under CbCR, multinational enterprise groups (MNE groups) with consolidated group revenue of 750 million euros (EUR) or more are required to report specified data on their international operations to their tax authority annually. That tax authority will in turn automatically exchange CbCR information to jurisdictions in which the MNE group operates and has an appropriate international agreement to exchange such information. In the Isle of Man, the first reporting fiscal year was that beginning on or after 1 January 2017.

Where there is no CbCR reporting obligation, there is a requirement to notify the Assessor of Income Tax of the name of the entity that is undertaking the reporting and to provide certain other information. This information is required as part of the company's Isle of Man income tax return.

Thin capitalisation

There is no specific thin capitalisation rule in the Isle of Man.

Controlled foreign companies (CFCs)

There is no CFC regime in the Isle of Man.