Isle of Man

Companies resident in the Isle of Man are taxed on their worldwide income and are required to file an annual income tax return reporting worldwide taxable profits calculated in line with local legislation and practice.

A non-resident company incorporated outside the Isle of Man but having a place of business or a permanent establishment (PE) on the Isle of Man will be taxed on the profit attributable to the Isle of Man establishment.

There are three rates of corporate income tax (CIT).

The 10% rate applies to income from:

• a banking business carried on in the Isle of Man on the basis of a deposit taking licence issued by the Isle of Man Financial Services Authority, and
• retail activities (i.e. the sale of goods to consumers through retail premises) carried on in the Isle of Man, but only if that profit exceeds 500,000 Isle of Man pounds (IMP) in the year.

The 20% rate applies to income derived from real estate situated in the Isle of Man.

The 0% rate applies to all other income.

Where an election is made, certain companies subject to Manx income tax at the standard 0% rate can elect to pay tax at the 10% rate.

The general rules for the calculation of taxable income are the same whether a company is liable to tax at 0%, 10%, 20%, or a combination of these rates. Both resident and non-resident companies are taxed on their income at the same rates.

Note that for 2024/25, a new 15% rate will be applied to certain banking business and large retailers. This rate will only apply to those banks and retailers whose profits would otherwise be subject to a top-up tax outside the Isle of Man under the OECD’s Pillar 2 Global Minimum Tax initiative.

Unilateral relief from double taxation in respect of foreign-source income is given by way of tax credit.

Local income taxes

There are no profit-based taxes levied by local government in the Isle of Man. However, commercial business rates are payable. Premises are assessed and given a ‘rateable value’ that forms the basis of the annual rates charge levied.