Isle of Man - Key Characteristics

Geographical and Historical

The Isle of Man is situated in the Irish Sea, halfway between the north west coast of England and Ireland. It has a population of approximately 75,000 with its main industries being the supply of financial services, tourism and agriculture.

Douglas is the island's capital and the principal port, as well as being the main business and financial centre.

The climate of the Isle of Man is relatively mild as it is moderated by the effect of the Gulf Stream, which reduces many of the climatic variations often experienced on the mainland of Great Britain.

The Manx nation shares its origins with the Celts of Scotland, Ireland and Cornwall and for over 450 years the island was ruled by the Vikings. It was during this period that the basis of the island's legislative assembly known as "Tynwald" was formed and is recognised as the oldest parliament in the world.

The island was granted to a noble English family for over 300 years, before being repurchased, with its sovereignty being re-vested in the name of the British crown, in 1765.

Law

A dependency of the British Crown, the island has a high degree of autonomy and exercises domestic, political and legislative independence through the Manx Parliament. In 1961 the parliament passed legislation abolishing higher than basic rate taxes and encouraging both new residents and industry - this heralded the birth of the Isle of Man as a financial centre.

European Union

The island enjoys a special relationship with the EU. The Isle of Man can export freely to the European market without the obligations and ties of membership required by full participants within the European Union.

In addition, a 22 acre "freeport" has been established on the island near the airport. This combines accessibility to the European markets with the added advantages of location in an offshore centre.

Taxation

Isle of Man companies are taxed at a rate of 0% on their trading and investment income. Income derived from land and property situated in the Isle of Man is taxed at a rate of 10% and banks are taxed on their banking business at a rate of 10%.

Individuals resident in the Isle of Man for more than six months in any tax year are liable to Manx income tax on their worldwide income. A non-resident is liable to Manx taxation on Manx source income.

Customs and Excise and VAT

The Isle of Man has a Customs & Excise agreement with the UK, creating a common customs area. This gives the Isle of Man access to the European Single Market.

The administration and collection of duties and VAT is conducted by the Isle of Man independently of the United Kingdom. The rates of tax and the rules of administration, assessment and collection are all identical to those in force in the United Kingdom.

Companies registered in the Isle of Man have the advantage of being able to register for VAT on the island and can obtain a VAT registration number. This means that these companies trading with EU member states are able to issue invoices without adding the charge for VAT. The main requirements for VAT registration are that books and records must be maintained on the island and that all invoicing, credit and debit note procedures should be maintained on the island.