With effect from 6 April 2006 the Isle of Man standard rate of income tax for companies was reduced to 0%, with a rate of 10% applying to income derived from banking business or from land and property within the Isle of Man.
The Isle of Man does not have any form of capital gains tax, inheritance tax or stamp duty land tax. Companies with profits subject to income tax at 0% with Manx resident shareholders are encouraged to distribute those profits by way of dividends as soon as possible, and a Distributable Profits Charge (DPC) applies in cases where profits are not distributed. Companies that are wholly owned by non-residents will not be required to pay a DPC, regardless of how much profit is distributed.
The DPC will be replaced by the Attribution Regime for Individuals (ARI) with effect from 6 April 2008. A charging provision will be introduced that will, in certain circumstances, attribute the profit of a company to its Isle of Man resident owners. This attributed profit will be taxed as the income of the owners.
For further information on the taxation of companies in the Isle of Man, please see:
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