CAYMAN ISLANDS Law and Practice Contributed by: Daniel Lee, Sophia Scott, Kimberly Robinson and James Turner, Maples Group
Employee’s Notice The period of notice of termination to be giv - en by the employee is such period as may be required by the employment contract or if not stated in the employee contract, then notice equal to the interval of time between the employ - ee’s pay days or 30 days, whichever is less. If the employee fails to give the appropriate notice, the employer may: • dismiss the employee prior to the date the employee 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 employee representation legislation. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers 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 an historic agreement for a “two pillar solution” to address the tax challenges arising from globalisation and the digitisation of the economy (”Two Pillar Solu - tion”). As the name suggests, the Two Pillar Solution is a two-pronged approach, aimed to bring about “a fairer distribution of profits and taxing rights among countries and jurisdictions with respect
to the world’s largest Multinational Enterprises (MNEs)”. Pillar One (the first prong) would provide a new right to tax large multinationals in the jurisdic - tions they operate in (“Pillar One”), while Pillar Two (the second prong) would introduce a new global minimum effective tax rate of 15%, ensur - ing that large multinationals pay a minimum level of tax in those jurisdictions (”Pillar Two”). Since July 2021, the Inclusive Framework on BEPS has been working towards the imple - mentation of the Two Pillar Solution. While Pillar One is still being developed, Pillar Two is taking shape. On 11 July 2023, an Outcome Statement was agreed by 138 members of the OECD/G20 Inclu - sive Framework on BEPS (including the Cayman Islands), recognising the significant progress made to date towards achieving the Two Pillar Solution (“Outcome Statement”). Pillar Two’s Outcome Statement says: “The global minimum tax under Pillar Two estab - lishes a floor on corporate tax competition which will ensure a MNE is subject to tax in each juris - diction at a 15% effective minimum tax rate regardless of where it operates, thereby ensur - ing 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 ini - tial signatories 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 effec - tive tax rate within the Cayman Islands.
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