New beginnings for a new tax year | 6 April 2020
As we start a new tax year, COVID-19 dominates our thoughts and puts almost everything else into true perspective. Nevertheless, for many people there will still be important actions and decisions that need to be taken in relation to their tax affairs.
At a local level, the Isle of Man Treasury have announced certain relaxations in terms of imminent filing deadlines, both in respect of personal tax filings (for those that had still not yet filed their 5 April 2019 return) and corporate tax returns. These sensible relaxations are very much welcomed.
Many Isle of Man companies have spent the last year or so grappling with the requirements of the Economic Substance legislation. One of those requirements relates to ensuring that impacted companies are properly “directed and managed” from the Island. The directed and managed test includes a requirement for directors to physically attend Board meetings in the Isle of Man – clearly this is something that will, at the present time, be impossible in certain scenarios due to our closed borders. We understand that the Assessor will, in due course, view any resultant failures in this area through a sympathetic and pragmatic lens.
From a broader perspective, tax residence may start becoming a concern to some: individuals and families who live across a number of jurisdictions may have an established pattern of living, in terms of where they spend their time, that has now been thrown on its head. They will need to look carefully at the tax rules in the jurisdiction(s) where they may now be spending more time than previously anticipated.
Finally, a word of appreciation: all of us at KPMG are deeply grateful to both the health care workers on the frontline and the many more key workers, who battle to keep us safe and life as normal as possible in these unsettled times.
For our dedicated COVID-19 content hub, see: https://home.kpmg/im/en/home/insights/2020/03/covid-19-ebulletin.html
KPMG Crown Dependencies