The Key Employee Concession ('KEC') can be extremely beneficial to new arrivals to the Island, if they are an entrepreneur setting up a new business, or a key employee being hired to develop or expand a new or existing company.
This concession provides that an individual will only be liable to Manx income tax on Manx source income.
In essence, only the individual’s Manx source employment income, including benefits in kind and rent arising from property in the Island is subject to Manx income tax. This means that an individual’s non-Isle of Man source income (and certain Isle of Man source income such as dividends and interest) is not subject to Manx income tax. The KEC currently applies for three tax years.
Individuals who move to the Isle of Man as a key employee in the establishment or expansion of a business, or who set up their own business, and are essential to the operation of the business, can apply for the concession. In order to grant the KEC, the Assessor of Income Tax must be satisfied that the new business is in the economic interests of the Isle of Man, and will provide additional employment in the Island.
This could be beneficial to those who have substantial income streams from global sources. Key workers and entrepreneurs must become Isle of Man resident, must be employed by the business on the Island and must be receiving a salary which reflects their key status.
It must be noted that this is a concession, and therefore at the discretion of the Assessor of Income Tax. Applications are handled directly by the Assessor; however, there are a number of on-island intermediaries and advisors who are able to provide further information on eligibility.
Eligible individuals must become Isle of Man resident
Most income, except Isle of Man employment income, is tax free
Maximum of 3 tax years
Employment must be in the interests of the economy of the Island
Suitable for key employers