Gov ‘Acknowledges’ G7 Tax Commitment

The Manx gov has said it acknowledges today’s commitment by the finance ministers and central bank governors of the G7 to a global minimum corporate tax rate of 15%.

After meetings in London, global leaders have also agreed an equitable solution on where taxation should be paid by multinational companies in an increasingly global and digital economy.

However, while the G7 nations have agreed to it, largely because it will help them pay off their massive Covid debts, other major economic powers such as China and Russia are not part of this agreement. This deal will put pressure on those nations to follow suit, but whether they do or not remains to be seen.

The move would almost certainly bring to an end the island’s “zero-ten” system for corporate tax. Chief Minister Howard Quayle has also given a very clear indication of the direction we’re heading. He said: ‘As a forward thinking, small but agile, open economy the Isle of Man is well placed to adapt and respond to international standards as they evolve.  Our record over the past two decades demonstrates this.  The Isle of Man’s long standing policy is to support international standards developed by organisations like the OECD that are adopted globally and provide for a level playing field.’

Formal negotiations are continuing within the Organisation 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 Profit Shifting, which takes place 30 June – 1 July 2021.

Treasury Minister Alf Cancan said: ‘Today’s agreement at the G7 is an important step towards a potential global political agreement by the Inclusive Framework on Base Erosion and Profit Shifting.  If global political agreement is reached significant further work will need to be undertaken at a global level in the coming months and years to bring these rules into operation.  The Isle of Man will of course continue to engage closely with partners on the final detail of the framework. I recently announced a review of the island’s economic strategy and taxation is a key part of this.  We must seek to ensure that the island continues to meet international standards while remaining competitive and an attractive place to live, work and do business.’

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