Further details for a possible cap on corporate tax are still uncertain despite positive feedback to an Isle of Man consultation.
The Isle of Man Treasury’s consultation on ‘Capping Corporate Tax Liabilities’ was published on 16 March and received a total of seven responses, on the whole welcoming the idea and the proposed cap of £6m.
However, the positive feedback has not hurried the decision-making process, with the Treasury pointing out it is an “ongoing” process, and although the feedback is welcome a schedule and details of the legislation are not yet available.
The aim of the consultation was to seek views about plans to limit corporate tax liabilities to a level above the current highest payer, which would ensure current revenue receipts are not reduced.
At the moment, the Isle of Man has a standard rate of 0% income tax for corporate taxpayers, however a small number pay income tax at 10%, with the second group including companies which hold banking licences.
In its response, the Isle of Man Treasury says the idea of introducing a cap was very well-received, as no-body rejected the idea although the responses ranged from “cautiously supportive” to “very enthusiastic”.
The proposed level of the cap had a slightly wider spread of opinions, with some believing the level, suggested at £6m, was about right and would keep the revenue level neutral, while others suggested £6m was no longer appropriate and should be reconsidered and some floated the idea of index-linking the figure so companies “knew where they stood”.
As a result of the extremely positive responses to the consultation, the Treasury says in its five-page response, it will take the feedback received into consideration in “future policy determination”.
It says: “The level of the cap, whether it should be subject to annual review via the Budget process or index-linked, and whether the cap should apply to the total aggregate tax liabilities of Manx groups of companies, needs more detailed exploration and consideration.”
But the Treasury adds while it welcomes the feedback, it points out as the “policy work is ongoing, no commitment can be given at this point in relation to the date of introduction or level of a corporate tax cap”.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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