EU confirms Isle of Man tax compliance

THE Isle of Man Government has confirmed that the abolition of the Isle of Man's Attribution Regime for Individuals (ARI) will mean its 0/10 corporate tax system is compliant with the EU Code of Conduct for Business Taxation.  The tax system was endorsed via a meeting of the European Environment Council.

Abolition of the ARI from 6th April 2012 was announced in the Manx Budget in February 2011.  The ARI system applied to all Isle of Man residents who had an interest in an Isle of Man registered company and were charged to the income tax on their share of the attributed profits of their company, in essence removing the corporate veil as if taxed directly - whether or not profits had actually been distributed to the shareholder.

The approval and the abolition will hopefully now bring some clarity to Isle of Man taxation following the Distributable Profits Charge regime introduced in April 2006 and ARI in 2008.

20th December 2011