Cyprus and IOM
incorporations. You can incorporate the company and register for
from 1st January 1993 Customs barriers between European Union member
states have been disbanded and there will no longer be a requirement
for customs declarations or clearance for most imports or exports
moving between E.U. member states.
VALUE ADDED TAX (VAT) & EU TRADING
Following implementation of the Single European
Market, an offshore trading company or any foreign company resident
outside the EU could have a potential VAT problem. Where an EU
supplier delivers goods to an EU customer and invoices through an
offshore/foreign company, the supplier will have to charge VAT
unless the invoicing company is VAT registered.
Although the Isle of Man is not a member of the EU by virtue of the
Customs and Excise Agreement between the United Kingdom and the Isle
of Man, the island has a value added tax (VAT) regime which is
essentially identical to, and interlinked with that of the UK. The
effect of this is that the two jurisdictions are treated as if one
for VAT purposes.
Again due to the Agreement the Isle of Man is regarded as part of
the European Single Market, and transactions involving the Island
are treated by Member States as if they involved the UK.
Registration for VAT within the Isle of Man may, for the purposes of
European Union VAT triangulation, alleviate some of the more onerous
consequences of registration for VAT in the country of supply.
Registration is primarily applied for by Isle of Man Resident or
Exempt Companies but may, in certain circumstances, be appropriate
in the case of non-Isle of Man companies, the latter needing also to
register on the “F” (Foreign) register.
Companies incorporated in the UK or in the Isle of Man, may apply to
register for VAT on the Island provided that they can show that day
to day management and control is effected from the Island.
Day to day management and control may be demonstrated by a number of
factors, or combinations of them; by showing that record keeping,
bank accounts, premises, directors, invoicing and administration
take place in the Island.
Once VAT-registered, normal VAT rules apply.
Companies trading outside the UK and the Isle of Man, would normally
be outside the scope of VAT, and so they would not be required to
register unless they wish to do so on a voluntary basis (this
usually being in order to recover VAT charged by UK or Isle of Man
suppliers e.g. VAT charged to them as an Isle of Man business by UK
accountants, lawyers, company administrators etc.).
The Isle of Man is the only jurisdiction in Europe, which provides a
full European Union Value Added Tax, whilst also providing for
complete exemption of trading profits from income or corporate
In order for offshore/foreign companies to be eligible for VAT
registration on the Island, they have to comply with the criteria
The company, if not Isle of Man incorporated,
must register as a foreign company.
In order to avoid any liability to Isle of Man
taxes the company should obtain exemption under the Income Tax
(Exempt Companies) Act 1984.
The company must have a resident director, a
resident qualified secretary and a resident approved person
responsible for the day-to-day business of VAT affairs including
completion and submission of returns.
All books and records must be held in the Isle of
Man, and all invoices etc. must originate on the Island.
The company must establish its business bank
account on the Island under the control of the local approved
Isle of Man companies and the need for a VAT
Obligatory: An IOM company trading in the UK/IOM
and having a turnover in excess of £55 000 per annum is obliged to
register for VAT
Optional: An IOM company trading in Europe
Not applicable: An IOM company trading worldwide
The fees for arranging VAT registration:
VAT Administration, Bookkeeping and Isle of Man Business Office
Provision for the Preparation of Statutory Accounts £250
Please note that in order to register the company for
VAT, you need to order the IOM company with nominee services
included, and to pay the VAT administration for the first 2
Check our U.K. and
IOM incorporations. You can incorporate the company and register