Tax treatment of dividends that specifically provides tax liability of a resident shareholder on receipt of dividends from domestic companies
The tax authority published Guidance Note 49 [PDF 1.2 MB] regarding the tax treatment of dividends that specifically provides that the tax liability of an Isle of Man resident shareholder on the receipt of dividends from an Isle of Man company can be fully or partially offset by tax credits when the profits out of which they have been paid have already been subject to tax. To obtain this concessional treatment a company must file a “reserves analysis” with its annual tax return.
In addition, the tax authority released Practice Note 224/24 [PDF 531 KB] amending the concessional treatment of the amounts currently contained within “Box 2“ of these reserves analyses (i.e., profits that arose in the 2005/2006 tax year or earlier and were subject to tax in the Isle of Man at a rate of at least 10%).
Read a March 2024 report prepared by the KPMG member firm on the Isle of Man