Tax - Isle of Man simplifies income tax

The Isle of Man council of ministers has approved the Income Tax (Amendment) Bill 2004 for introduction to the House of Keys. The Manx treasury is planning more legislation to simplify the income tax system.The Bill's measures, subject to approval by the House of Keys and Legislative Council, include:

•   Extending the current year basis of assessment to all income received by individuals and other non-corporate taxpayers, including income from investments, self-employment and other sources.

•   An extra two months - five months instead of three - to make a tax return. But overdue returns will be subject to a new 50 penalty after September 2005.

•   New defined powers for the Assessor of Income Tax to obtain documents including material relevant to the international exchange of tax information on request.

•   Provision to prevent the avoidance of Manx tax by company directors, for example, using company loans to exploit the differential between corporate and personal income tax rates.

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