10.01 PRINCIPAL TAXES
The principal tax in the Isle of Man is income tax. Income tax is divided into a resident income tax, charged on the income from all sources of persons residing in the Isle of Man, and a non-resident income tax, charged on the Manx-source income of persons residing outside the Island.
The other main taxes in the Isle of Man are value added tax, customs and excise duties, National Insurance (social security) contributions, a property tax known as rates, and vehicle and other license fees. There are no taxes on capital gains, wealth, inheritance, or gifts in the Isle of Man.
10.02 BASIC LEGISLATION
The Income Tax Act 1970 is the last consolidated Tax Act. It has been updated and amended by Income Tax Acts of 1971, 1973, 1974, 1976, 1978, 1980, 1981, 1984, 1985, 1986, 1988, 1989, 1991 and 1995. The Isle of Man Government has also enacted additional specific legislation designed to attract investment to the Island:
Income Tax (Exempt Insurance Companies) Act 1981
Income Tax (Exempt Companies) Act 1984
Non-resident Company Duty Act 1986
International Business Act 1994
This legislation, which has also been updated and amended, contains the provisions designed to enable overseas investors to benefit from using the Island in international structures.
Income tax is administered by the Income Tax Division of the Treasury under the Assessor of Income Tax. Value added tax and customs duties are administered by the Commissioners of Customs and Excise.
There is no formal system of obtaining advance rulings from the tax authorities. However, the Assessor is often prepared to give an informal indication of his department's interpretation of the law on particular issues.
The information given is not exhaustive and is based on conditions existing at 5 May 1999. Readers are advised to consult with professionals, such as independent accountants, legal counsel, and investment bankers, before taking any formal action. Deloitte & Touche would be pleased to discuss specific problems.