The consultation was issued by the Isle of Man Government’s income tax division as part of a commitment made by treasury minister Eddie Teare in his first budget in February to "publish a new tax strategy before the end of the year".
Teare became treasury minister last year, after four years as minister of health and social security.
In addition to asking Isle of Man businesses whether the 10% corporate tax rate should be extended to other business areas than just banks, as it is now under the island’s Zero 10 scheme. Under zero-10 regimes, most businesses pay no corporation tax, while some industries, such as banks, pay 10% and a few pay 20%.
"The Government is committed to retaining a tax-neutral form of business structure in the Isle of Man as a key aspect of our competitiveness," the consultation document says.
"At the same time, it is accepted that the 0% rate, which was preceded [in the Isle of Man] by the tax exempt company system, leads to some negative comment internationally and was one of the features of our tax system which the EU Code of Conduct Group reviewed in 2010 – 2011."
Jersey, the document adds, taxes all regulated financial services companies at 10%, "not only the banks", while in Guernsey, regulated utilities are taxed at 20%, and "some countries operate without income taxes at all, and derive more of their public revenues from, for example, import duties, VAT or equivalent taxes and fees for work permits".
Among the other questions asked of IoM businesses:
- Should the Isle of Man do more in the area of international tax co-operation, and if so, what would be appropriate?
- Should we have an array of tax law which allows us to finanlise all aspects of a double taxation agreement, and in particular assistance in the recovery of tax debts?
- Should the Isle of Man do more in the area of international tax cooperation, and if so, what would be appropriate?
To read or download the consultation document, click here.
