Tax Concessions Law (1995 Revision) THE TAX CONCESSIONS LAW (CAP. 164)

Tax Concessions Law (1995 Revision) Supplement No. 7 published with Gazette No.11 of 29th May, 1995. THE TAX CONCESSIONS LAW (CAP. 164) (1995 Revision) Consolidated with Laws 22 of 1969, 6 of 1973, 25 of 1991 and 12 of 1994. Revised under the Law Revision Law (19 of 1975). Originally enacted- Cap. 164-1st January, 1964 Law 22 of 1969-15th December, 1969 Law 6 of 1973-28th June, 1973 Law 25 of 1991-12th December, 1991 Law 12 of 1994-23rd September, 1994 Consolidated and revised this 4th day of April, 1995. Tax Concessions Law (1995 Revision) TAX CONCESSIONS LAW (1995 Revision) ARRANGEMENT OF SECTIONS Part I-Preliminary 1. Short title 2. Definitions Part II-Approved Investments 3. Approval of investments 4. Tax exemption on approved investments 5. Saving re taxes Part III-Exempted Companies 6. Governor to give undertaking 7. Saving re exemptions 2 Tax Concessions Law (1995 Revision) 3 Tax Concessions Law (1995 Revision) TAX CONCESSIONS LAW (1995 Revision) PART I-Preliminary Short title 1. This Law may be cited as the Tax Concessions Law (1995 Revision). Definitions 2. In this Law, unless the context otherwise requires- “approved investments” mean any investments approved by the Governor in Council in accordance with section 3; “business” includes enterprise and industry; 1990 Revision “exempted company” means a company registered as an exempted company under section 182 of the Companies Law (Revised); and “Governor” means the Governor in Council. PART II-Approved Investments Approval of investments 3. (1) Subject to this section, the Governor, on the application of any company, may approve the investment of money in a business carried on or proposed to be carried on in the Islands, and which conforms to the following requirements- (a) its operation is such as is likely to bring direct benefit to the Islands, either in development of the tourist industry, beneficial exploitation of natural resources, development of export trade, increased revenues to the Government, improved provision of internal needs, or otherwise as the Governor may be satisfied will redound to the public good; and (b) it undertakes to employ available Caymanian unskilled and skilled labour and clerical and supervisory staff in preference to non- Caymanian unskilled or skilled labour or clerical or supervisory staff with comparable qualifications. (2) The Governor shall not approve an investment under this section unless he is satisfied that, other than the value of land, the amount of money to be invested in the business is not less than ten thousand dollars and that not less than 4 Tax Concessions Law (1995 Revision) three-fourths thereof is being brought into the Islands from sources outside the Islands for the purpose of the investment. 4. (1) An approved investment shall be exempted from any form of tax or Tax exemption approved investments duty computed on profits or income, which may be imposed by any legislation having effect in the Islands. (2) The exemption aforesaid shall be for such reasonable period as will, in the opinion of the Governor, permit the company to recoup in profits or net income the approved investment, and shall in no case be for more than twenty-five years from the date on which the investment is approved. (3) The Governor may, on the application of any company, approve an increase of that company’s approved investment, but the period of exemption pursuant to subsection (2) shall not thereby be extended beyond the period originally established in relation to that company. 5. In the event of the enactment of any legislation in the Islands imposing any Saving re taxes tax referred to in this Part, nothing herein contained shall be construed so as to prevent the application of any such tax to any company in respect of capital other than approved investments, or in respect of profits or income therefrom. PART III-Exempted Companies 6. (1) The Governor may give an undertaking to any exempted company that Governor to give undertaking makes application therefor that no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to such exempted company or its operations. (2) An undertaking given under subsection (1) may provide, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax, shall be payable- (a) on or in respect of the shares, debentures or other obligations of the exempted company; or (b) by way of the withholding in whole or part of any relevant payment. (3) In subsection (2)(b) “relevant payment” means- (a) a payment of dividend or other distribution of income or capital by the exempted company to its members; or 5 Tax Concessions Law (1995 Revision) (b) a payment of - (i) principal or interest; or (ii) other sums due under a debenture or other obligation of the exempted company. (4) In the period beginning 1st May, 1963 and ending on the 15th November, 1994- (a) the power of the Governor to give an undertaking to an exempted company under subsection (1) shall be deemed always to have included the power to give in any such undertaking the provision described in subsection (2)(b); and (b) any undertaking given under subsection (1) shall be deemed to include the undertaking described in subsection (2)(b). (5) Any such undertaking as aforesaid may be for any period not exceeding thirty years from the date of the approval of the application and may be in such form as the Governor shall determine. Saving re exemptions 7. Nothing in this Part shall be construed as exempting any other person not being an exempted company, exempted limited partnership or exempted trust ordinarily resident in the Islands from any Law imposing any tax referred to in this Law. Publication in consolidated and revised form authorised by the Governor in Council this 4th day of April, 1995. Mona N. Banks-Jackson Clerk of Executive Council 6