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10.1. Specific Incentives

The incentives for business in the Isle of Man include minimal taxation and a series of programs providing grants, loans, and other forms of assistance.

Minimal Taxes

The primary incentive for business in the Isle of Man is the fact that the corporate income tax rate is 0% for most business types. However, income received by licensed banks from a deposit taking business and income from land and property is taxed at 10% and 20% rate, respectively. Retail profits are taxed when they exceed GBP 500,000.

In addition, the Isle of Man levies no capital gains tax, stamp duty, and generally no withholding or dividends tax.

Tax Holiday on Land Development Projects

In 2016, the Isle of Man introduced a tax holiday on land development projects, whereby an income tax exemption is available for up to five years for new commercial development projects.

Grants, Loans, and Assistance Programs

The Isle of Man provides a number of programs designed to encourage new start-up businesses and investment by existing companies in new technologies, working practices, and efficiencies.

The following introduces the main programs:

Business Support Scheme

The business support scheme provides a 50% grant up to GBP 4,500 per project for qualifying companies who engage approved business consultants for various business improvement projects. The types of project that can qualify include:

  • Marketing;
  • Design;
  • E-business;
  • Environmental efficiency;
  • Human resources development;
  • Quality;
  • Operations management;
  • Business and strategic planning;
  • Information communication technology/information systems; and
  • Business and financial management controls.

Financial Assistance Scheme

The government offers various grants and soft loans for qualifying companies to adopt new technologies and business practices in order to achieve economic growth in the Isle of Man. The basic qualifying criteria for projects include:

  • Company currently undertakes or will undertake economic activity in the Isle of Man;
  • Assistance provided will encourage sustainable economic growth in the Isle of Man; and
  • Form and amount of assistance is reasonable in relation to the circumstances of the project.

The main grant types under the scheme are as follows (non-exhaustive):

Capital grants

  • Up to 40% of costs of new buildings, building improvements, new plant and machinery, including hardware and software

Operating grants

  • Up to 40% of non-recurring costs for the establishment of a project;
  • Up to 40% of the costs of new marketing ventures;
  • Up to 40% of the costs of implementing quality standards; and
  • Up to 40% of the cost of renting a factory for the initial period of a project.

Green Business Loan Scheme

Under the Green Business Loan Scheme, the Isle of Man will provide interest-free financing for companies seeking to improve the energy efficiency of their operations. The scheme will provide loans for up to 100% of the cost of an energy efficiency project ranging from GBP 1,000 to a maximum of GBP 20,000.

Financial Assistance for Vocational Training

The Financial Assistance for Vocational Training scheme is designed to provide financial assistance to both individuals and businesses for worker training. Eligibility for the support is at the discretion of the Dept. of Economic Development, with primary focus given to the following anticipated benefits:

  • Increased productivity;
  • Expanded range of products and services;
  • Increasing revenue to the employer; and
  • Providing skills for new and emerging sectors.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, the Isle of Man introduced the following measures:

  • Salary Support Scheme - The scheme provides salary support for businesses severely affected (i.e., impacted by a reduction in revenue of at least 25%) by the pandemic by way of a contribution of GBP 310 (increased from GBP 280, effective 1 March 2021) per week per full-time employee. The scheme is subject to certain conditions and exclusions, depending on the period of claim. The gross salary paid to employees is allowed as a deduction while computing the tax liability of the employer;
  • Business Support Scheme - The scheme provides grants of up to GBP 3,500 to eligible businesses that are impacted by a reduction in turnover of at least 25% due to the COVID-19 pandemic and was subject to other conditions. The benefit was available to affected businesses until 30 April 2021. However, self-employed businesses engaged in travel and tourism that are impacted by a reduction in turnover of at least 50% due to border restrictions can avail a grant of up to GBP 3,000 until 31 July 2021; and
  • Strategic Capacity Scheme - The scheme provides financial assistance to tourism accommodation businesses that are impacted by the COVID-19 pandemic. The benefit is available from 1 April 2020 until 30 June 2021 (extended from 31 March 2021).

It is clarified that the amounts received under the above schemes will be charged to corporate income tax (see Sec. 6.1.).