The Isle of Man is an excellent alternative to the UK as a location to obtain an EU VAT number for non EU businesses. Although the Island is an autonomous jurisdiction with its own legal system and tax system, it has a VAT sharing agreement with the United Kingdom; which means an Isle of Man VAT registration is a fully EU compliant one with the prefix GB. EU customers would simply see the registration as indistinguishable from a UK one.
Isle of Man VAT registration applications are processed by Isle of Man Customs and Excise, who also administer the VAT collection system.
Customs and Excise in the Isle of Man are both efficient and helpful. I can personally vouch for the fact that it’s possible — when absolutely necessary, to obtain a VAT number for a new business in the Isle of Man within 24hours — although a typical time-scale, assuming the paperwork is in order, would be about one week.
The Isle of Man does not offer an overseas registration to non-resident companies — these must be dealt with in the UK — slow and laborious though this is.
However, there are two strategies which qualify overseas clients — such as US businesses who anticipate making vatable supplies within the EU for registration in the Isle of Man.
Strategy 1 — A US company could establish a subsidiary in the Isle of Man. As the Isle of Man company is deemed to ‘belong’ in the Isle of Man, it is able to qualify for registration as a domestic business. It is important to note that Isle of Man businesses enjoy Customs Union with the EU which means, full unfettered access to the EU market place for goods and most types of service. Additionally, the Isle of Man enjoys a 0% corporate tax rate so there is no additional tax cost to establishing locally. There are many local ‘corporate services providers’ like our own — Middleton Katz Chartered Secretaries LLC which could assist in setting up a managing Isle of Man subsidiary company.
Strategy 2 — A US company could establish a branch office in the Isle of Man and make application for ‘F’ Registration in the Isle of Man under part XI of the Isle of Man Companies Act 1931 — following such a registration — which is a formality, a non-Isle of Man company would be deemed to belong in the Island and would be eligible to make application for VAT registration. Once again, a local corporate service provider would be able to provide an office address for the branch, facilitate the F registration and deal with the ongoing administrative requirements.
There are also many non-tax reasons for US businesses to set up their EU beach-head in the Isle of Man — these are outlined here.
In both cases, it would necessary for the applicant to make vatable supplies and for them to maintain relevant accounting books and records in the Isle of Man.