In
the Cayman Islands there are no taxes other
than import duties (at varying rates), stamp
duty at rates up to 7.5% on transfers of real
estate. There is a 1% stamp duty payable on
mortgages of less than CI$300,000, and 1.5%
on mortgages of CI$300,000 or higher; however
issues of securities, mutual fund shares or
units are normally exempt from stamp duty. See
Types of Company
for details of annual fees payable by companies,
and Offshore Legal
and Tax Regimes for details of fees
payable by various types of financial institution
and in respect of listing on the Cayman Islands
Stock Exchange.
During
2003 the Cayman government battled to avoid
inclusion in the scope of the EU's Savings Tax
Directive, but in the end was forced to give
in by the UK Treasury, and applied the information
exchange model under the Directive from 1st
July, 2005. This means that information about
interest on savings paid to citizens of European
member states is being forwarded to the tax
authorities of the member state in question.
The
Cayman Islands authorities have put a brave
face on this development, which they tried hard
to avoid.
The
Cayman Island’s then Financial Secretary Mr
George McCarthy said: "International business
is attracted to the Cayman Islands because of
the critical mass of experienced professional
advisers, our robust and effective regulatory
system, innovative products and services and
an approach to tax which is business-friendly.
We have signed and implemented commitments on
tax transparency. We have consistently asked
for fairness - a level playing field and equitable
treatment. It is not a case of us asking to
be let into your ports 'for a bit of financial
raiding', but of the Cayman Islands correcting
decades of negative spin by competing onshore
financial centres."
In
return for Cayman's acceptance of the Directive,
the UK agreed to pursue discussions on a Double
Tax Avoidance Treaty.
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