Isle of Man Adapts to G20 Global Tax Reforms
The historic agreement, which was agreed by most of the world’s countries at the G20 summit on Friday, suggests that multinational companies will pay a fairer share of taxes.
This will lead to the introduction of a corporate tax of at least 15% for large firms in the countries where they do business.
Howard Quayle said the island has “good room” for adaptation.
A deal that would oblige large firms to pay taxes in the countries where they make a profit, rather than in the low-tax jurisdictions where they are located, would discourage potential tax evasion.
The implementation of the deal will change the island’s current tax regime.
According to current regulations, only large retailers and banking businesses are taxed at 10%, while income from land and property is taxed at 20%.
The new minimum rate will take effect in 2023.
Quayle said the island has experience working with local businesses and other jurisdictions to “respond quickly and adapt to changing global standards.”
Now the next administration must “think about how best to position” the island in light of the reforms, he added.
Finance Minister Alfred Cannan said the government would “work constructively with both local businesses and the international community,” and the technical details of the deal “will contribute to the island’s future economic strategy.”
A review of the Isle of Man tax system is already under way as part of a new long-term strategy.
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