Cayman Islands Tax Neutrality Overview

Published: June 19, 2021

The Cayman Islands Tax Neutral regime is a globally responsible tax model that is simple and transparent, and efficiently supports the global free flow of investment capital and financing without posing tax harm to other countries’ tax bases.

As the Cayman Islands is tax neutral, it adds no additional tax to financial services transactions in its jurisdiction. Investee entities and investors are still subject to reporting and paying their relevant taxes in their home jurisdictions. In addition, the Cayman Islands meets globally accepted standards for transparency and cross border cooperation with tax authorities and law enforcement. Cayman’s Tax Neutral policy is supported by United Nations and OECD Model Conventions. While the OECD Model Tax Convention on Income and Capital gives guidance on the use of Double Taxation Treaties to address the burden of double taxation on cross border economic activities, it also recognises alternative tax policy models for addressing (i) double taxation, (ii) tax conflict mediation, and (iii) tax information sharing to protect against tax evasion and aggressive tax avoidance. The Cayman Islands Tax Neutral regime meets the criteria of such an alternative tax policy model.

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