Implementing rules around a new global tax regime could bring in £35m a year.
Measures are being introduced in response to the Organisation for Economic Co-operation and Development’s Pillar Two initiative, which aims to ensure that businesses that operate across international boundaries pay a fair share of tax wherever they are based and generate profits.
The changes were revealed today (Tuesday 15 October) by Treasury Minister Dr Alex Allinson MHK during his financial statement to the October sitting of Tynwald.
He said: “In March I stood again in this honourable Court to discuss our tax strategy and our commitment to both widen the tax base and continue to comply with international tax standards.
“Next month I shall be introducing new legislation relating to the OECD Pillar 2 Global Minimum Tax rules and a 15% Domestic Top-up tax for large multinational groups. This will come into effect from January 1 2025 with further primary tax legislation being introduced next year.
“Significant consultation has been carried out with the companies involved and we will continue to work with them to ensure that the Island remains a competitive and attractive base for business growth, innovation and entrepreneurship.”
Pillar 2 global minimum tax measures only apply to MNE groups with annual combined revenues of €750m or more. The measures do not impact businesses whose annual revenues are below this threshold.
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