Cayman Island Taxation

Open About Cayman Islands

The Cayman Islands, located in the western Caribbean Sea, were colonised from Jamaica by the British during the 18th and 19th centuries and were administered by Jamaica after 1863.

In 1959, the islands became a territory within the Federation of the West Indies. When the Federation dissolved in 1962, the Cayman Islands chose to remain a British dependency.

The Cayman Islands are an overseas territory of the United Kingdom.

They are divided into six districts, with Georgetown as the capital. The official language of the Cayman Islands is English. The currency in the Cayman Islands is the Cayman Islands dollar (KYD).

With no direct taxation, the islands are a thriving offshore financial centre.

A stock exchange was opened in 1997. The tourism and financial services industries create a significant majority of gross domestic product (GDP).

Open Taxes & Duties

General Taxes: Corporate income, capital gains, payroll, or other direct taxes are not imposed on corporations in the Cayman Islands.

VAT (Value Added Tax): There is no VAT imposed in the Cayman Islands.

Import Duties: Import duty is paid, generally at a rate of 22% to 27%, on importation of most goods. Refer to the Cayman Islands Customs’ website (www.cbc.gov.ky/) for the latest list of tariff rates.

Excise Taxes: There are no excise taxes in the Cayman Islands.

Property Taxes: There are no property taxes in the Cayman Islands.

Stamp Duties:

• Stamp duty is paid, generally at a rate of 7.5%, on transfers of Cayman Islands immovable property.

• Stamp duty, in the form of a transfer tax equal to the applicable stamp duty, also applies to transfers of shares in land holding companies.

• Cayman Islands stamp duty may also be payable if any documents are executed in, after execution brought to, or produced before a court of the Cayman Islands. Such stamp duty will

Open Corporate Residence

Since no corporate income, capital gains, payroll, or other direct taxes are currently imposed on corporations in the Cayman Islands, corporate residency and group taxation is not relevant in the context of Cayman Islands taxation.

Entities engaged in 'scheduled' trade and business in the Cayman Islands (as defined in the Trade & Business Licensing Law) are required to have a trade and business licence.

Concluding contracts and exercising powers in the Cayman Islands to conduct business abroad is generally not considered conducting trade or business within the Cayman Islands.

Open Income and Deductions

Income Determination: Since no corporate income, capital gains, or other taxes are imposed on corporations in the Cayman Islands, income determination is not relevant in the context of Cayman Islands taxation.

Branch Income: Branches are treated the same as other corporations doing business in the Cayman Islands.

Deductions: Since no corporate income, capital gains, or other taxes are imposed on corporations in the Cayman Islands, deductions from income are not relevant in the context of Cayman Islands taxation.

Open Tax Credits and Incentives

Since no corporate income, capital gains, or other taxes are imposed on corporations in the Cayman Islands, tax incentives are not relevant in the context of Cayman Islands taxation.

However, Cayman entities carrying on business outside the Cayman Islands can register as 'exempted companies' (i.e. a company formed primarily to do business outside of the Cayman Islands and subject to certain requirements) and can apply under the Tax Concessions Law for an undertaking to be issued by the Governor-in-Council (i.e. the Cayman Islands government) exempting such company from any tax on profits, income, gains, or appreciation that might be introduced in the period of 20 years following the grant of such concessions. The concession is extendable for a further ten years after expiry.

'Exempted limited liability partnerships' (i.e. certain partnerships formed primarily to do business outside of the Cayman Islands) can apply under the Exempted Limited Partnership Law for a similar concession that is for 50 years (

Open Withholding Taxes & Tax Administration

Withholding taxes:

Currently, no withholding taxes (WHTs) are imposed on dividends or payments of principal or interest.

Tax administration:

No tax returns, forms, or procedures are required to be completed for tax compliance purposes in the Cayman Islands. The Tax Information Authority serves as the competent authority in the Cayman Islands.

Open Tax Information Reporting

Overview:

The Cayman Islands currently has 36 signed Bilateral Agreements, of which 29 are in force.

You can refer to the Tax Information Authority’s website for the latest list of Bilateral Agreements.

The Cayman Islands agreed with the United Kingdom (UK) government to implement the Savings Directive, and so the Reporting of Savings Income Information (European Union or EU) Law (2007 Revision) came into force, setting out a reporting regime whereby Cayman paying agents making interest payments to individuals who are tax resident in an EU member state may have to report interest paid.

The Cayman Tax Information Authority receives or facilitates submission of such information reporting.

The Cayman Islands will comply with the regulations set forth under the Common Reporting Standard (CRS).

The country recognises that the regulations are a key component of the Cayman Islands’ impleme

Open Taxes & Duties

Taxes On Personal Income: There are no income or withholding taxes imposed on individuals in the Cayman Islands.

VAT (Value Added Tax): There is no VAT imposed in the Cayman Islands.

Net-Wealth/Worth taxes: There are no net wealth/worth taxes in the Cayman Islands.

Inheritance, estate, and gift taxes: There are no inheritance, estate, and gift taxes in the Cayman Islands.

Property Taxes: There are no property taxes in the Cayman Islands.

Stamp Duties: Stamp duty is paid, at various rates, on transfers of land/property and execution of certain documents.

Import duties: Import duty is paid, at various rates, on importation of most goods.

Open Individual Residency

The Cayman Tax Information Authority can grant tax residency certificates to individuals ordinarily resident in the Cayman Islands.

This may be relevant or desirable for citizens of European Union (EU) member states for the purposes of compliance with Reporting of Savings Income Information Law.

Though not a direct or indirect tax, the following requirements may impact individuals working in the Cayman Islands:

Work permits are required for non-Caymanian individuals seeking to work (temporarily or long term) in the Cayman Islands.

The cost of work permits varies by occupation/position and is revised periodically. The most recent revision occurred in 2022.

Participation in approved private pension and private health insurance plans is mandatory.

This is paid by the employer, who is entitled to reimbursement from the employee up to a certain amount.

Open Income and Deductions

Income determination: Since no income taxes are imposed on individuals in the Cayman Islands, income determination is not relevant in the context of Cayman Islands taxation.

Deductions: Since no income taxes are imposed on individuals in the Cayman Islands, deductions from income are not relevant in the context of Cayman Islands taxation.

Note: Cayman paying agents making interest payments to individuals who are tax resident in an EU member state may have to report interest paid under the terms of the Reporting of Savings Income Information Law.

This reporting is typically done using the "Annual Reporting Form".

The specific form used for this compliance is known as "Form ARF" (Annual Reporting Form for Savings Income Information). The form captures details of the interest payments made and provides necessary information to the Cayman Islands Tax Information Authority for onward transmission to the relevant EU tax authorities.

It’s crucial for paying agents to ensure accurate and ti

Open Tax Credits and Incentives

Foreign Tax Relief: Since no income taxes are imposed on individuals in the Cayman Islands, foreign tax relief is not relevant in the context of Cayman Islands taxation.

Other Tax Credits and Incentives: Since no income, inheritance, wealth, capital gains, withholding, or other taxes are imposed on individuals in the Cayman Islands, tax credits and incentives are not relevant in the context of Cayman Islands taxation.

Open Tax Administration

No tax returns, forms, or procedures are required to be completed, in general, for tax compliance purposes in the Cayman Islands.

Note: Cayman paying agents making interest payments to individuals who are tax resident in an EU member state may have to report interest paid under the terms of the Reporting of Savings Income Information Law.

This reporting is typically done using the "Annual Reporting Form".

The specific form used for this compliance is known as "Form ARF" (Annual Reporting Form for Savings Income Information).

The form captures details of the interest payments made and provides necessary information to the Cayman Islands Tax Information Authority for onward transmission to the relevant EU tax authorities.

It’s crucial for paying agents to ensure accurate and timely reporting to comply with the law and avoid potential penalties.