Isle of Man Parliament Passes the Global Minimum Tax (Pillar Two) Order 2024

On November 21, 2024, the Isle of Man Parliament passed the Global Minimum Tax (Pillar Two) Order 2024.

Section 7 of the Order states that its purpose is to give legal effect in the Isle of Man to the GloBE Rules to implement:

– an income inclusion rule (IIR) (referred to in the Order as a Multinational Top-up Tax or ‘MTUT’) that is intended to be a Qualified IIR;

-a minimum tax that is intended to be a Qualified Domestic Minimum Top-up Tax (QDMTT) (referred to in the Order as a Domestic Top-up Tax or DTUT).

The Order does not give legal effect in the Isle of Man to the under-taxed profits rule (‘UTPR’).

The provisions of the Order will apply to fiscal years that commence on or after January 1, 2025.

The Order is implemented as a temporary taxation order under Section 115A of the Income Tax Act, 1970. 

As such it comes into effect once approved by the Tynwald (the Isle of Man Parliament). In general, it applies for a period of up to 24 months after the date on which the order is approved.

It can cease to have effect unless within the next 12 months after the day on which the order is approved by Tynwald, a Bill confirming the order is read a second time by the House of Keys, or a Bill is amended by the House of Keys so as to include a provision confirming the order.