The Isle of Man tax system is likely to have to change drastically after the world’s largest economies agree to set a global minimum corporate tax rate of 15%.
Most businesses pay no corporate tax in the Isle of Man.
The “Zero-10” policy is an incentive to attract international companies to the island and create jobs.
G7 finance ministers and central bank governors agreed today on a global minimum corporate tax rate of 15% as well as a fair solution to the taxes payable by multinational companies in an increasingly global and digital economy.
Formal negotiations are continuing within the Organization for Economic Co-operation and Development (OECD), ahead of a meeting of the 139 member jurisdictions of the OECD Inclusive Framework on Base Erosion and Taxation. profit transfer, which will take place from June 30 to July 1.
After the announcement of the G7 agreement, the government issued a press release.
Chief Minister Howard Quayle MHK said: “As an open, small but nimble economy, the Isle of Man is well positioned to adapt and meet international standards as they evolve. Our record over the past two decades demonstrates this. The Isle of Man’s long-standing policy has been to support international standards developed by organizations like the OECD that are adopted globally and provide a level playing field.
Treasury Minister Alfred Cannan MHK said: “Today’s agreement at the G7 is an important step towards a possible global political agreement through the inclusive framework on base erosion and profit shifting . If global political agreement is reached, significant additional work will need to be undertaken globally in the months and years to come to put these rules into effect. The Isle of Man will of course continue to engage closely with its partners on the final details of the framework.
“I recently announced a review of the island’s economic strategy, undertaken by KPMG on behalf of the Isle of Man government, and taxation is a key part of it. We must ensure that the island continues to meet international standards while remaining competitive and an attractive place to live, work and do business.