Isle of Man Income Tax Division Issues Revised Guidance Note on Incorrect Returns Including Increased Penalties

On 21 March 2016, the Income Tax Division of the Isle of Man Treasury issued a revised guidance note (GN 34). GN 34 covers the procedures and penalties for incorrect returns.

The main changes in the revised version concern the level of penalties imposed. Under the Isle of Man's Income Tax Act 1970, the maximum penalty imposed for underpaid tax resulting from an incorrect return is up to 100% of the tax due, and up to 200% in cases of fraud. Interest also applies. In practice, a lower penalt…