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Isle of Man - Overview and introduction

Isle of Man - Overview and introduction

Taxation of International Executives

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The town of Peel on the Isle of Man in the Irish Sea

All information contained in this document is summarized by KPMG LLC, the Isle of Man member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on Isle of Man tax legislation, guidance published by the Isle of Man Income Tax Division and applicable case law as at the date of publication hereof.

Individuals resident in the Isle of Man are subject to income tax on their worldwide income. Non-residents are taxable on income from Manx sources only.

The Isle of Man does not tax capital gains nor does it have any form of gifts or annual wealth tax. There is no inheritance tax or estate duty but there is a small probate levy.

Following a couple’s marriage or commencement of residence after 6 April 2006, couples are assessed independently for Manx tax purposes unless they elect for joint taxation. Where couples are independently assessed, each spouse will file their own tax return and will be responsible for paying their own tax liability. If a married couple elects for joint taxation, assessments will be made on a married couple as a single entity. In this case, both husband and wife are responsible for filing a tax return detailing their joint income and are liable jointly and severally for any outstanding tax liability.

Taxable income (after deduction of personal allowances and available reliefs) is taxed at graduated rates of 10 percent and 20 percent, with the exception of non-resident individuals whose income is charged to income tax at a flat rate of 20 percent, subject to certain excepted income.

Social security contributions are payable by both employers and employees and are calculated as a percentage of the employee’s wage.

The official currency of the Isle of Man is the British Pound Sterling (GBP).

Herein, the host country/territory refers to the country/territory to which the employee is assigned. The home country/territory refers to the country/territory where the assignee lives when they are not on assignment.

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