The Customs and Excise Agreement between the United Kingdom and the Isle of Man has been in place since 1979, when it replaced the previous Common Purse arrangements. Under the Agreement the Island keeps its indirect tax regime largely in line with that of the UK, allowing the free movement of goods between the 2 countries.
Amongst other things the Customs and Excise Agreement removes the need for customs barriers between the Isle of Man, the UK and the EU, and makes the Island part of the European VAT territory.
The Agreement also makes provision for the Revenue Sharing Arrangement (RSA), the agreed formula by which VAT and most other indirect tax revenues are split between the United Kingdom and the Isle of Man.
Documents relating to the Customs and Excise Agreement and the underlying Revenue Sharing Arrangement between the governments of the Isle of Man and the United Kingdom can be downloaded from this page.