Can you Opt-out of Tax Residence in the Island?
Posted: Wed Feb 19, 2025 11:00 am
The legislation in each Island also includes specific powers to request additional information in relation to any substance information provided on or with the income tax return.
The legislation allows the Income Tax authorities to enquire into the income tax return of a corporate taxpayer, provided notice of the enquiry is given within 12 months of the receipt of the income tax return, or amendment to that return.
Failure to Comply
It is important too, that clients continue to monitor company activity to ensure ongoing new zealand mobile database compliance with the substance requirements, as a company may not be subject to the substance test in one year but fall into the regime in a subsequent year.
Sanctions can be imposed including penalties between £50k and £100k for a first offence, with additional financial penalties for a subsequent offence. In addition, where the Assessor believes there is no realistic possibility of a company meeting the substance requirements, he may seek to have the company struck off the register.
In the Isle of Man, for instance, if, as is often the case, such companies are in fact tax resident elsewhere (and registered as such), the board of directors could elect (within section 2N(2) ITA 1970) to be treated as non-IOM tax resident. This means they will cease to be IOM corporate taxpayers and the Order will not apply to those companies, although the company will still exist.
The legislation allows the Income Tax authorities to enquire into the income tax return of a corporate taxpayer, provided notice of the enquiry is given within 12 months of the receipt of the income tax return, or amendment to that return.
Failure to Comply
It is important too, that clients continue to monitor company activity to ensure ongoing new zealand mobile database compliance with the substance requirements, as a company may not be subject to the substance test in one year but fall into the regime in a subsequent year.
Sanctions can be imposed including penalties between £50k and £100k for a first offence, with additional financial penalties for a subsequent offence. In addition, where the Assessor believes there is no realistic possibility of a company meeting the substance requirements, he may seek to have the company struck off the register.
In the Isle of Man, for instance, if, as is often the case, such companies are in fact tax resident elsewhere (and registered as such), the board of directors could elect (within section 2N(2) ITA 1970) to be treated as non-IOM tax resident. This means they will cease to be IOM corporate taxpayers and the Order will not apply to those companies, although the company will still exist.