Cayman Islands Tax Compliance Skill v2.0

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Section 1 -- Quick Reference

Field	Value
Country	Cayman Islands
Tax	Import duties (primary), work permit fees, financial services fees, stamp duty, tourism tax
Currency	KYD (1 KYD = ~1.22 USD)
Tax year	N/A (no income tax)
Primary legislation	Tax Concessions Act (Revised); Customs Tariff Act (Revised)
Supporting legislation	Companies Act (Revised); Economic Substance Act, 2018
Tax authority	None dedicated -- Dept of Commerce and Investment; Customs and Border Control
Filing portal	N/A -- no direct tax filing
Contributor	Open Accountants Community
Validated by	Pending -- requires sign-off by a licensed Cayman practitioner
Skill version	2.0

Tax Landscape

Tax Type	Status
Income Tax (personal/corporate)	None
Capital Gains Tax	None
VAT / Sales Tax	None
Payroll Tax	None
Withholding Tax	None
Property Tax (annual)	None
Estate / Inheritance Tax	None
Import Duties	Yes -- primary revenue source
Work Permit Fees	Yes
Financial Services Fees	Yes
Stamp Duty	Yes -- on real estate transfers
Tourism Tax	Yes -- 13% hotel tax

Tax Undertaking Certificate: up to 50 years for companies, 30 years for individuals.

Import Duty Rates

Category	Rate
General merchandise	22% -- 27%
Food	15% -- 22%
Motor vehicles (standard)	29.5%
Luxury vehicles	42%

Conservative Defaults

Ambiguity	Default
Unknown duty rate	General merchandise (22%)
Unknown economic substance	Assume relevant activity

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Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable -- nature of inquiry (employment, imports, entity registration, property).

Recommended -- entity type, number of employees, import values, property details.

Ideal -- complete registration documents, prior customs filings, economic substance reports.

Refusal Catalogue

R-KY-1 -- Income tax. "Cayman Islands has no income tax."

R-KY-2 -- VAT/sales tax. "Cayman Islands has no VAT or sales tax."

R-KY-3 -- Economic substance detail. "Escalate to specialist."

R-KY-4 -- CRS/FATCA reporting. "Escalate to specialist."

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Section 3 -- Compliance Pattern Library

3.1 Employer Obligations

Obligation	Amount/Rate	Notes
Pension (mandatory)	10% (5% employer + 5% employee)	National Pensions Act
Health insurance	Employer must provide	Minimum coverage prescribed
Work permit fees	Varies by category	Non-Caymanian workers
Payroll tax	None

3.2 Import Duty Categories

Category	Rate	Notes
General merchandise	22%	Most goods
Food items	15% -- 22%
Motor vehicles (standard)	29.5%
Luxury vehicles	42%
Fuel	Specific rates	Per gallon

3.3 Entity Registration Fees

Entity Type	Annual Fee (approx. KYD)
Exempted company	850 -- 3,000+
Exempted limited partnership	750 -- 2,500+
Mutual fund (regulated)	3,000 -- 4,000+

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Section 4 -- Worked Examples

Example 1 -- Import Duty

Input: Office equipment KYD 10,000.

Computation: Duty at 22%: KYD 2,200. No VAT. No sales tax.

Example 2 -- Employment Obligations

Input: Employee at KYD 60,000/year, non-Caymanian.

Classification: No income tax. No payroll tax. Pension: KYD 6,000 (5%+5%). Health insurance: mandatory. Work permit: required, annual fee.

Example 3 -- Hotel Tax

Input: Hotel room charges KYD 500.

Computation: Tourism tax: 13% x KYD 500 = KYD 65.

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Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 No Direct Taxes

No income tax of any kind. No capital gains tax. No VAT/sales tax. No withholding tax. No payroll tax. No property tax. No estate tax. Tax Undertaking Certificates guarantee this for up to 50 years.

5.2 Stamp Duty

Real estate transfers: 7.5% of consideration or market value. First-time Caymanian buyer concessions may apply.

5.3 Pension and Health Insurance

Mandatory for all employees aged 18-65. Pension: 10% split equally. Health insurance: employer must provide compliant plan.

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Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Economic Substance

Entities conducting relevant activities must demonstrate adequate substance. Flag for specialist.

6.2 Duty Concessions

Development agreements may include duty waivers. Flag for practitioner.

6.3 Real Estate (Non-Caymanian)

Foreign ownership restrictions may apply. Stamp duty 7.5%. Flag for practitioner.

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Section 7 -- Excel Working Paper Template

CAYMAN ISLANDS -- Working Paper

A. IMPORT DUTIES
  A1. Import value                                 ___________
  A2. Category / duty rate                         ___________
  A3. Total duty                                   ___________

B. EMPLOYMENT OBLIGATIONS
  B1. Total payroll                                ___________
  B2. Pension contributions (10%)                  ___________
  B3. Health insurance cost                        ___________
  B4. Work permit fees                             ___________

C. ENTITY FEES
  C1. Annual registration fee                      ___________

REVIEWER FLAGS:
  [ ] Economic substance filing required?
  [ ] Work permits current?
  [ ] Pension contributions current?

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Section 8 -- Bank Statement Reading Guide

Bank	Format	Key Fields
Cayman National, Butterfield	PDF, CSV	Date, Description, Debit, Credit, Balance
CIBC FirstCaribbean	CSV	Date, Narrative, Amount

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Section 9 -- Onboarding Fallback

ONBOARDING QUESTIONS -- CAYMAN ISLANDS
1. Nature of inquiry (employment, imports, entity, property)?
2. Entity type (exempted company, LP, fund)?
3. Employees in Cayman? How many?
4. Non-Caymanian employees (work permits)?
5. Import goods into Cayman?
6. Own property in Cayman?
7. Relevant activities for economic substance?
8. Hotel/tourism operations?
9. Annual registration fee current?
10. Prior customs/duty filings available?

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Section 10 -- Reference Material

Topic	Reference
Tax concessions	Tax Concessions Act (Revised)
Customs duties	Customs Tariff Act (Revised)
Companies	Companies Act (Revised)
Economic substance	Economic Substance Act, 2018
Pensions	National Pensions Act
Health insurance	Health Insurance Act
Stamp duty	Stamp Duty Act
Tourism tax	Tourism Accommodation Tax

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PROHIBITIONS

• NEVER state Cayman Islands has income tax -- it does not
• NEVER state Cayman Islands has VAT or sales tax -- it does not
• NEVER state Cayman Islands has payroll tax -- it does not
• NEVER apply direct tax calculations to Cayman entities
• NEVER ignore import duty obligations
• NEVER ignore economic substance requirements
• NEVER ignore CRS/FATCA reporting for financial institutions
• NEVER present calculations as definitive

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Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com.

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