Isle of Man cuts corporation tax to zero |
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Wed, 22 Feb 2006 10:20
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LONDON: The Isle of Man has cut its corporation tax to zero for most companies as of 5 April aiming to lure inward investments. The Crown dependency in the Irish sea, announcing the policy decision in its annual budget Tuesday, said it will retain the10 per cent rate for banks and some other firms.
Treasury minister Allan Bell, in his budget presentation, said the measure is in line with a promised five-year taxation plan announced in 2000.
The budget also provided for personal income to be taxed at a basic rate of 10 per cent and a higher rate of 18 per cent, but it brought a cap at a maximum level of 100,000 pounds per annum. This will benefit wealthy residents earning more than 570,000 pounds a year. They will also have no capital gains or inheritance tax.
A spokesperson for the treasury said the cap on income tax is to attract active, wealthy entrepreneurs who might move here personally, then bring their business with them.
Bell said the budget is part of the government's promises to the international community and "demonstrates the Isle of Man's ongoing commitment to innovation".
At present, the Isle of Man offers zero per cent corporate tax rate for businesses involved in e-commerce, space technology and insurance. It had 21 successive years of growth and in the last 10 years alone the growth had been on an average of 7.4 per cent, contributed mostly by financial services, e-business and film-making.
Tax experts feel the Crown dependency would become one of the most favourable tax regimes in the world.
Several offshore tax havens are planning similar initiatives especially following European Union's directives to halt cross-border tax evasion.
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