An accountancy firm gave a presentation to 200 people about the Isle of Man’s tax regime at a special seminar.

KPMG held its regular summer tax update at the Claremont Hotel in Douglas.

The subjects ranged from tax investigations to EU substance requirements.

Robert Rotherham, associate tax director, began by outlining the increased activity KPMG had seen in tax authority investigations, mainly from the UK’s authorities but also from the Manx income tax division.

KPMG says that tax authorities globally are taking an increasingly sophisticated and targeted approach when instigating inquiries, aided by the abundance of information they are now receiving through measures such as the Common Reporting Standard and Country by Country Reporting).

The Manx income tax division in particular is focusing increasingly on payroll issues, with areas such as employee Benefits in Kind and share schemes of increasing interest, as well as the issues of the use of personal service companies and determining whether someone is an employee or self-employed.

From a UK perspective, the activities of the Offshore Property Developer Tax Force are of particular interest for businesses in this sector.

Mr Rotheram was followed by Georgia Kenyon, a tax manager in the Isle of Man practice, who explained the new Country by Country Reporting provisions and how they may affect an Isle of Man company that is is part of a global group.

KPMG’s tax director David Parsons then outlined the new anti-avoidance provision that was introduced in the Isle of Man’s 2018 Budget.

He explained that while it may catch certain ’mischief’ in relation to tax avoidance, it could also inadvertently catch genuinely commercial transactions.

Paul Cawley, senior VAT manager, provided an update on recent activity in the area of VAT, outlining the new ’DASVOIT’ provisions that have applied in the UK since January 1.

While there were already provisions in place in relation to the disclosure of avoidance schemes for VAT purposes, DASVOIT extends these requirements to other indirect taxes. the UK’s tax authorities are also dealing with the ’Making Tax Digital’ project, requiring UK VAT registered businesses to maintain digital records and remit this using third-party software with effect from April 2019. This project is being pushed by Her Majesty’s Revenue and Customs as a means of closing the £3 billion per year tax gap in VAT filing errors.

Clare Kelly, senior tax manager, highlighted that from April 2019 it is expected that the scope of UK tax on non-UK residents disposing of UK property will be expanded to include the sale of UK commercial property as well as the indirect sale of UK property in certain situations.

A number of current exemptions are also likely to be removed in relation to the disposal of UK residential property.

Ms Kelly then highlighted that it is also expected that non-UK resident corporates with UK source rental income will be subject to corporation tax from April 2020 (they are currently subject to UK income tax). Draft legislation in relation to these changes is expected imminently so that the full extent of these changes can be identified.