Impact of G7 global tax deal on Isle of Man 'not yet known'

Alfred Cannan said a review of the island's economic strategy included a review of tax

More detail is needed before the impact a new agreement on global taxation will have on the Isle of Man is known, the treasury minister has said.

The introduction of a minimum rate of 15% and the taxation of big companies in the countries where they do business was agreed at the latest G7 meeting.

Under the island's current tax system, many businesses pay no tax on profits.

Alfred Cannan said at present the deal only outlined "overall strategic policy", without any firm details.

The deal would combat potential tax avoidance by obliging companies to pay tax in the countries where their profits are generated rather than in a low tax jurisdiction where they are headquartered.

It would also set a minimum corporation tax rate for all companies, which would be at odds with the island's current regime.

Under the island's current tax regime, only large retailers, banking businesses, land and property income are taxed at rates of 10% and 20% respectively.

A review of the Manx taxation system is already underway as part of the development of a long term economic strategy for the island.

The landmark global agreement will now be considered at the next meeting of the G20, which includes India and China, in July.

Mr Cannan said "significant further work" would be needed on a global level over a number of years to bring the rules into operation, should the deal receive full political approval.

He said: "At the moment we're long on the overall strategic direction, but we don't have a lot of detail.

"Until we get that detail and we understand it, only then will we begin to understand how it will impact the island and indeed what position we would be adopting."