- In simple terms the Isle of Man is neither a part of the UK nor the EU.
- However, by reason of the Customs and Excise Agreement it has with the UK, the Island has a unique, close relationship with the EU.
- The Agreement created an indirect tax and customs union whereby the Isle of Man and UK are seen as one territory for customs, VAT and most excise duty purposes.
- The relationship of the Isle of Man with the EU is recognised in European Law by means of Protocol 3 of the UK’s Act of Accession to the European Community.
- As a result, for Customs and Excise purposes only, the Isle of Man is treated as being part of the UK and EU.
- Custom duty rates, rules, procedures, decisions etc are common across the EU.
- Goods arriving in the EU Customs Territory must clear customs and any taxes due must be paid.
- To obtain customs clearance through the Isle of Man the goods must currently arrive in either the UK or Isle of Man.
- The UK and Isle of Man share a fully computerised system called CHIEF (Customs Handling of Import and Export Freight) which accepts declarations, decides on the clearance status and calculates the taxes due.
- Having cleared customs, the goods are then in ‘free circulation’ for delivery to any Member State.
- Any taxes due are charged to a deferment account and paid to Customs and Excise in the month following import.
Locating in the Isle of Man
- Provides non EU businesses the opportunity to access EU markets from a low tax jurisdiction.
- Offers solutions to deliver cost effective EU import/export models which meet business and regulatory needs.
- Gives businesses a foothold in Europe, thereby developing closer links with target markets.
- Allows for ease of EU access either using a ‘turnkey’ solution by outsourcing to existing international trade structures (eg for incubation), or through bespoke arrangements.
- Isle of Man Customs and Excise provide dedicated ‘one stop shop’ customer services to simplify and streamline the process of regulatory set up and customs clearance.
- Potential cost savings from operating in a zero corporate tax regime.
- Ease of set up – through turnkey services (eg for incubation) or bespoke arrangements.
- Potential to optimise supply chain efficiency, profitability etc.
- No need for goods to arrive in Isle of Man.
- Provides international trade facilities from an Island base for goods arriving in the UK.