The Isle of Man Private Limited Company has become a popular corporate vehicle for carrying out international trade particularly with the European Union countries where all trades are subject to Value Added Tax (VAT) Accounting.
The rate of corporate income tax on trading and investment income is 0% and the rate of corporate income tax on banking business income and land & property income is 10%. The rate of withholding tax on taxable distributions to non-residents is the same as the rate of tax paid by the company.
In the event that Manx companies are owned by Manx trusts, the residence of a trust for tax purposes (notwithstanding that it may have Isle of Man-based trustees) generally will be determined by the residence for tax purposes of the beneficiaries of the trust.
The result of the foregoing is that clients who are not resident in the Isle of Man for tax purposes can utilise a tax-resident Isle of Man company for trading purposes (most effectively within Europe as an Isle of Man company can be registered for V.A.T.) with no Isle of Man tax on the profits thereof or on distributions therefrom.
The abolition of corporate tax also added substantially to the attractions of asset-holding companies on the Island, which already benefit from the absence of capital gains tax, stamp duty or inheritance tax.
Since 2006 there has been a cap of individual income tax liability on worldwide income, the current rate for 2012 is £120,000 p.a. with a view to encouraging entrepreneurs to relocate to the Isle of Man, thereby encouraging growth of the Manx economy.
The OCRA Worldwide team has particular expertise in the utilisation of Manx business entities for international trade and investment and for real property and intellectual property holding.
A bespoke 'offshore' solution can be complex and requires careful planning and execution. We therefore encourage our clients to contact us directly, without obligation.
While all of our consultants in our offices provide a Free Initial Consultation, the office listed below has particular expertise in this area and will gladly assist with advice on how to approach your unique challenge.
Alternatively, to select one of our multilingual offices, click here for a list of our office contact details.
Languages spoken in this office: English
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