The Cayman Islands government and the industry representatives for the financial services sector have responded to the agreement by G7 countries to impose a 15 per cent minimum global tax rate on major tech companies and other multinational companies.
In a statement on Monday, following the decision by the G7 finance ministers last Saturday, the Cayman Islands Government(CIG) said:
“The G7 announcement aligns with the Cayman Islands' overall position that taxes should be paid where they are rightfully owed.”
The government also stated: “While the Cayman Islands’ primary business is investment funds, which are tax neutral under international tax rules, we continue to support international tax compliance by adhering to international tax standards.”
Meanwhile, Cayman Finance, the body which represents the financial services sector, issued its own statement on the issue in which it also emphasised the jurisdiction’s tax neutral status in the context of the G7 decision.
“Our tax neutral regime recognises the importance of taxing the right people, at the right place, at the right time. Indeed, Cayman’s tax information-sharing commitments enable more effective tax collection by other jurisdictions,” Cayman Finance said.
It explains that the Cayman Islands is a tax neutral jurisdiction and our financial services industry is the world’s leader in international investment funds, which are internationally recognised as tax neutral.
“Cayman achieves tax neutrality in the simplest and most cost-effective way possible: it does not add another layer of tax on top of that imposed by other jurisdictions. This enables our financial services industry to do what it does best, facilitating investment throughout the world, thereby driving global economic growth and prosperity.”
According to Cayman Finance, “Our industry will continue to play this important role, much needed during this time of recovery from a global pandemic, following any implementation of a global minimum tax rate for multinational enterprises.”
Taken as a whole, it adds, Cayman’s tax neutrality and international commitments protect against tax evasion, aggressive tax avoidance, unfair tax competition and any tax harm to other jurisdictions.
The industry association said, “That’s a record we are proud of and will continue to advocate for in international standard-setting efforts.”