CAYMAN ISLANDS Law and Practice Contributed by: Daniel Lee, Sophia Scott, Kimberly Robinson and James Turner, Maples Group
for each day of unused vacation leave accrued at the time of termination. Employee’s Notice The employee must be given notice as specified in the employment contract or, if not stated, notice equal to the interval between pay days or 30 days, whichever is less. If the employee fails to give appropriate notice, the employer may: • dismiss the employee prior to the date the employ - ee intended to leave by the number of hours or days the notice falls short; and • forfeit all unused vacation leave accrued by the employee during the current employment year. 4.5 Employee Representations The Cayman Islands currently has no form of employ - ee representation legislation. The Cayman Islands currently has no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. 5.2 Taxes Applicable to Businesses On 1 July 2021, 130 members of the OECD/G20, including the Cayman Islands, signed a historic agree - ment for a “two pillar solution” to address the tax chal - lenges arising from globalisation and the digitisation of the economy (“Two Pillar Solution”). As the name suggests, the Two Pillar Solution is a two- pronged approach, aimed to bring about “a fairer dis - tribution of profits and taxing rights among countries and jurisdictions with respect to the world’s largest Multinational Enterprises (MNEs)”. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers Pillar One (the first prong) would provide a new right to tax large multinationals in the jurisdictions they operate in (“Pillar One”), while Pillar Two (the second prong) would introduce a new global minimum effec - tive tax rate of 15%, ensuring that large multination -
als pay a minimum level of tax in those jurisdictions (“Pillar Two”). Since July 2021, the Inclusive Framework on BEPS has been working towards the implementation of the Two Pillar Solution. While Pillar One is still being devel - oped, Pillar Two is taking shape. On 11 July 2023, an Outcome Statement was agreed by 138 members of the OECD/G20 Inclusive Frame - work (including the Cayman Islands), recognising sig - nificant progress towards the Two Pillar Solution. Pillar Two’s Outcome Statement says: “The global minimum tax under Pillar Two establishes a floor on corporate tax competition which will ensure a MNE is subject to tax in each jurisdiction at a 15% effective minimum tax rate regardless of where it oper - ates, thereby ensuring a level playing field. This global minimum tax framework under Pillar Two is already a reality, with over 50 jurisdictions taking steps towards implementation”. While the Cayman Islands was one of the initial sig - natories to the agreement for a Two Pillar Solution, Pillar Two has not yet been adopted nor has a public announcement been made regarding the introduction of a minimum effective tax rate within the Cayman Islands. The Cayman Islands has, however, been con - firmed for a fifth consecutive year under the OECD’s BEPS Action 5 review as having introduced economic substance requirements that meet all aspects of the standard, with no issues identified in relation to effec - tiveness in practice. Please refer to 5.1 Taxes Applicable to Employees/ Employers . 5.3 Available Tax Credits/Incentives Please refer to 5.1 Taxes Applicable to Employees/ Employers . 5.4 Tax Consolidation Please refer to 5.1 Taxes Applicable to Employees/ Employers .
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