CAYMAN ISLANDS Law and Practice Contributed by: Adam Johnson, Appleby
8.3 Municipal Taxes There are no municipal taxes paid on the occupation of business premises. However, subject to limited exceptions, real estate used for paid tourist accom - modation attracts tax at a rate of 13% of the amount charged to each tourist. 8.4 Income Tax Withholding for Foreign Investors The Cayman Islands does not directly tax income or capital gains. 8.5 Tax Benefits The Cayman Islands does not directly tax income or capital gains.
Subject to limited exceptions, real estate used for paid tourist accommodation attracts tax at a rate of 13% of the amount charged to each tourist. There are no other domestic taxes or municipal rates currently payable on the occupation, acquisition, own - ership or disposal of Cayman Islands real property or income deriving therefrom. Generally, the buyer/tenant will be responsible for paying any stamp duty and registration fees. 8.2 Mitigation of Tax Liability There are no commonly used methods that can be employed to mitigate stamp duty on large real estate portfolio purchases. However, a purchaser is free to apply for a discretionary waiver or reduction of stamp duty from the Minister of Finance. Where the acquisition is financed and secured by Cayman Islands assets, a mechanism exists to avoid paying “double duty” on separate security instru - ments that secure the same debt. In such cases, the ad valorem duty may be paid on the primary security instrument, and the other security instruments can be expressed to be “collateral”, “auxiliary”, “additional” or “substituted”, and attract a fixed rate of duty at KYD50.
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