Isle of Man Finance

The Isle of Man enjoys a unique and longstanding relationship with the UK (and consequently with the EU) by virtue of the negotiated inter-government Customs and Excise Agreement. This provides for the unhindered movement of goods and facilitates trade with our EU partners and beyond. Whilst it is true to say that the terms of this Agreement link the Isle of Man to the UK with regard to Customs, Excise and VAT methodologies, it does not bind the Island to adopt all indirect taxation initiatives emanating from the UK or beyond.

Significantly the Isle of Man has chosen not to introduce taxes such as insurance premium tax, landfill tax, aggregates levy etc, nor is it currently seeking to extend the scope of its indirect taxation.

Several areas of flexibility exist to benefit both Isle of Man VAT registered businesses and/or Island residents. For example, i) the Island’s approach to VAT on international services, and ii) the 5% VAT rate on the provision of hotel and holiday accommodation. However, for a business to profit from the full range of benefits the Island has to offer, it needs to be VAT registered in the Isle of Man.

Whilst the unique position of the Island provides an ability to settle disputes locally, business customers retain the right of access to the services of the fully independent UK VAT Tribunals (which sits in the Island to hear appeals) and, if necessary, can call on EU VAT Directives and decisions of the UK and EU courts systems.

For further information on VAT please see the Customs and Excise website.