The Isle of Man’s Treasury Minister Allan Bell has said “no immediate changes” are planned to the island’s tax regime.
Bell was seeking to reassure the island’s business community, which currently benefits from a ‘zero-10’ regime, under which most firms pay no corporation tax and financial institutions just 10%.
However, the EU’s Code of Conduct Group objects to such systems, claiming they constitute a ‘harmful tax practice’, prompting reviews in three Crown Dependencies that operate them – the others being Jersey and Guernsey. All three are currently consulting on the regimes.
Bell’s assurance of “no immediate changes” is unlikely to do much to assuage fears that the Isle of Man may have to amend the tax code at some point, even if it is done in the next budget, which is due in February.
Commitment to international standards
Bell said the Manx government was committed to maintaining the island’s tax framework within internationally acceptable boundaries as defined by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes and EU Code of Conduct on Business Taxation.
“Reviewing international developments and the Isle of Man’s taxation regime so that it is in keeping with the key responsibilities will take some time. An open and consultative process has commenced and Treasury will ensure that updates are provided regularly.
“It is likely that some support from external advisers will be necessary in order that fully informed policy options can be formulated. Any decisions regarding changes to the business tax system will be made only after extensive and in-depth consultation and will, of course, be subject to the normal legislative procedures of Tynwald.”
