Tax returns and payments

Home About the Isle of Man Tax returns and payments

Taxation Period

The tax year ends on 5 April. Assessments are on an actual basis (for partnerships, sole traders and individuals), ie in respect of the accounting year ending in the same tax year. Companies are taxed on an accounting period basis pay and file system.

Tax Returns

Tax returns (for both individuals and other non-corporate taxable entities) must be returned to the Assessor of Income Tax by 6 October immediately following the relevant tax year; fines may be levied where returns are filed late. Employees who have had tax deducted at source must complete and file a return. As companies are assessed on an accounting period basis, returns are issued at the end of a company's accounting period. The due date for the filing of company tax returns is 12 months and one day after the end of the accounting period. This is also the date by which payment of any income tax liability or charge must be made. Returns can be filed and payments can be made before the due date.

Deduction at Source on Employment Income

Employers carrying on business in the Isle of Man are required to deduct from the employment income of their employees a sum on account of the employee’s income tax liability and to pay that deducted sum to the Assessor of Income Tax under the ITIP (Income Tax Instalment Payment) system. In calculating the amount of tax to be deducted, account should be taken of the allowances and reliefs to which the employee is entitled.

Payment Dates

Income tax is required to be paid, following an assessment, by individuals by 6 January in the year following the tax year to which the payment relates. Interim assessments may be raised earlier than the final assessment and require a payment on account of the tax liability by 6 January in the year following the year of assessment; any interim payment made will be taken into account in assessing a final liability to income tax in respect of the tax year. In the case of companies, payment of income tax is due by twelve months and a day after the financial year-end of a company.

Additional Assessments

The tax authorities can make an additional assessment within six years after the end of the tax year if the taxpayer has filed an incorrect return. In the case of fraud or deliberate non- disclosure there is no limit on the period where assessments may be reopened.

Advance Rulings

In general, the Assessor of Income Tax is not prepared to give binding advance rulings on the manner in which any given transaction will be treated for tax purposes. However, the Assessor is prepared to take part in informal discussions in relation to proposed transactions and to give non-binding indications of the tax treatment which he is likely to apply.