A corporate tax cap of at least £5m is to be introduced in the Isle of Man following a consultation ...
A corporate tax cap of at least £5m is to be introduced in the Isle of Man following a consultation by the Isle of Man government.
The cap has been welcomed by the island's banking industry, which believes such an amount will keep it more competitive than other offshore jurisdictions.
John Sheath, managing director of Bradford & Bingley International, said: "This will put the Isle of Man ahead of other jurisdictions such as the Channel Islands, which does not have a cap on corporate tax and it will act as an incentive for companies to come to the island. This will help the economy grow from the extra business it will create."
Banks that responded to the consultation document agreed with the Treasury that the tax should be revenue neutral (above the current maximum tax paid by a company).
The industry also said the figure should be index linked so companies could prepare for future taxes.
The banks also suggested that their subsidiaries or associated businesses be allowed to pool their tax liabilities for the purposes of the cap.
Allan Bell, Treasury minister for the Isle of Man, said: "We have received positive feedback from the consultation process and all the responses will be taken into consideration in future policy determination.
"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 aggregate tax liabilities of Manx groups of companies, needs more detailed exploration and consideration. The information gathered during this consultation will be used by the Treasury when considering the detailed policy issues surrounding the potential future introduction of a corporate tax cap."
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