CIG appears unfazed by G7 tax deal

| 07/06/2021 | 90 Comments
Officials from the Group of 7 countries

(CNS) UPDATED: The Cayman Islands Government appeared unfazed Monday when it responded to the weekend reports that the G7 wealthy nations have agreed a deal to establish a minimum global corporation tax of at least 15% for multinational companies that currently try to steer profits through countries with low or no tax rates.

Aimed at tech giants such as Google, Facebook and Amazon, the finance ministers agreed during the meeting in London to take on tax avoidance by some of the world’s richest companies by creating both a flat world tax rate to prevent them from chasing the lowest tax deals and to make them pay their taxes where they make their profit. Responding to the news, the Cayman Islands Ministry of Financial Services said very little.

“The G7 announcement, which would predominately affect multinational enterprises, aligns with the Cayman Islands’ overall position that taxes should be paid where they are rightfully owed. While the Cayman Islands’ primary business is investment funds, which are tax neutral under international tax rules, we continue to support international tax compliance by adhering to international tax standards,” unnamed officials said in a very short statement from the ministry.

Cayman has no corporation tax at all and tax matters are a devolved issue. There has been no comment so far from the UK government on how this agreement would impact its overseas territories.

Cayman Finance has also now commented on the announcement, which was not unexpected, echoing the government’s statement and claiming that Cayman even assists other countries to collect what tax is due to them.

“The Cayman Islands is a tax neutral jurisdiction and our financial services industry is the world’s leader in international investment funds, which are internationally recognised as tax neutral,” CEO Jude Scott stated. “Cayman achieves tax neutrality in the simplest and most cost-effective way possible: it does not add another layer of tax on top of that which is imposed by other jurisdictions. This enables our financial services industry to do what it does best, facilitating investment throughout the world, thereby driving global economic growth and prosperity.”

He said the industry would continue to this role during the recovery from the global pandemic, following any implementation of a global minimum tax rate for multinational enterprises.

“Our tax neutral regime recognises the importance of taxing the right people, at the right place, at the right time. Indeed, Cayman’s tax information-sharing commitments enable more effective tax collection by other jurisdictions. Taken as a whole, Cayman’s tax neutrality and international commitments protect against tax evasion, aggressive tax avoidance, unfair tax competition and any tax harm to other jurisdictions. That’s a record we are proud of and will continue to advocate for in international standard-setting efforts,” Scott added.

The deal announced on Saturday is between the US, the UK, France, Germany, Canada, Italy and Japan but they are likely to put pressure on other countries to get on board ahead of the G20 meeting next month. The agreement will be discussed in detail at a meeting of the G20 finance ministers in Venice, where countries such as Brazil, China and Russia will be in attendance.

Chancellor of the Exchequer Rishi Sunak, who hosted the summit, said the agreement would make the global tax system “fit for the global digital age”.

Several non-profits that campaign against offshore financial centres said that the rate was too low and would not stop what they called tax havens from operating. “It’s absurd for the G7 to claim it is ‘overhauling’ a broken global tax system by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore,” said Oxfam’s executive director Gabriela Bucher in a statement. “They are setting the bar so low that companies can just step over it.”

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Category: Business, Financial Services, Politics

Comments (90)

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  1. Anonymous says:

    Let’s take a different approach to the conversation- what are the opportunities for Cayman from the G7 Tax Deal?

  2. Anonymous says:

    • Hubert says:

      Better pray the G7 doesn’t go after hedge funds or we are totally screwed economically.

      • Anonymous says:

        6:09 In the US there is a lot of talk on hedge fund managers paying little or no income tax with the carried interest scheme. That is definitely a target for the near future.

  3. Anonymous says:

    All the U.S. has to do is prohibit its banks from transferring cash in and out of Cayman, then it will be all over.

    • Anonymous says:

      Most of the money doesn’t come anywhere near Cayman.

    • Anonymous says:

      No, it would have to prohibit Cayman companies/banks from having US bank accounts. Money into and out of Cayman domestic banks is small.

      • Anonymous says:

        Lol. The US banks and the political establishment are the ones using Cayman to launder billions.

  4. Anonymous says:

    The people who want this are the high tax EU jurisdictions and the US left wing who need taxes to pay for social giveaways. EU approval needs unanimity and US implementation need 2/3 of the Senate. What is China going to want? No one is going to agree without China. Even if the G20 somehow agrees to this, the tax laws will be all over the place. There are many scenarios that could benefit Cayman.

    • Anonymous says:

      Great point. When it gets to the floor of the US Senate or House it is doomed to failure. The US will never cede it’s tax authority or control to another country or entity like the G7 or G20. Democrat or Republican. End of story.

    • Anonymous says:

      Taxes do not pay for anything. They just print money from nothing, endless amounts every month

    • Anonymous says:

      8:53 – It’s not for giveaways as you say. It’s to stop the high net worth freeloaders that don’t pay their fair share while passing the tax burden to the working class. They sure enjoy making money but cry when it comes time to pay for the great infrastructure and security that developed nations offer.

  5. Anonymous says:

    This is an Amazon, alphabet, Facebook law, nothing to worry about in cayman.

  6. Anonymous says:

    If <5% of Cayman's 110,000 companies are foreign, that's about 5,500 companies, and if they were all to cancel, it would equate to <1 year's worth of normal routine terminations on the CI Register. This doesn't move the needle on anything, since we are adding more entities than we are loosing. Adios suckers!

  7. Anonymous says:

    Anybody else has an issue with 7 countries making decisions on the minimum tax rate for all countries? In case you were wondering about the definition of institutional racism … there it is.

  8. Anonymous says:

    Oops – perhaps you’ll have to let the tourists come back now …

  9. Anonymous says:

    Cayman moves over 6 trillion dollars every day.
    No that’s not a typo….

    Tax 1% of this money and put it back into Caymanians and the local economy the propper way.

    Wake up people, we being frauded by our own gov which knows this.

    • Anonymous says:

      Seriously – you know none of that money is anything to do with Cayman, it’s there in name only?
      But maybe you all should start paying tax as well!

    • Anonymous says:

      You’re a Genius. Move 6 trillion dollars overnight and watch it never return, I can see the column of planes taking the rich people and tourists with them as you go back to turtling and making rope.

    • Anonymous says:

      put it back into caymanians????
      doe the the entitlement culture never end???

      • Anonymous says:

        No cow, no milk.

        The real entitlement culture comes from foreign investors expecting to Uber around at their heart’s content in the Cayman Islands finance vehicle but not contribute a single penny to fuel. Pump and dump.

        I trust the concept of a mirror is an enigma to you.

        • Anonymous says:

          Single penny? I’ve spent thousands $ just to open a company here

        • Anonymous says:

          Right – no cow, no milk – back to smoke pots, fishing and turtling. But since there are hardly any turtles and fish anymore, I guess Caymanians will have to reach farther back into their heritage and start pirating again.

          • Anonymous says:

            Thanks to all the money laundering by foreign investors in real estate. Destroying our environment, from coast to coast, all while locals are left out in the sea and disenfranchised of any voice in national major decisions.

            Flogging season is coming.

          • Anonymous says:

            6.56 But first we will have to get rid of modern day pirates like you.

        • Anonymous says:

          “foreign investors” “not contribute a single penny” in the same sentence? Read that again bobo. I don’t think you understand how the Financial Services work in cayman, much less the concept of investing lolol

    • Anonymous says:

      Excellent point. The comments above this are utter nonsense. Remember that the government take something like 0.001% stamp duty on the trillions of transactions, just like your 30 bucks butterflied monthly charge for using your debit card every day, it adds up. The offshore finance industry funds this island, tourism is a little top up.

    • Anonymous says:

      Where to even start? LOL. What a post.

    • Anonymous says:

      Put it back 🤡

      Do you live in west bay?

  10. The Cynical Tax & Democracy lie says:

    I wonder if the wonderful Joey Biden is ever going to address his home state of Delaware tax haven status . Yet these great nations will never address the real problem of Corruption in their own countries. As for these save the world groups like oxfam and such operations using their monies to pay extortion monies and bribes to murderous regimes and terror groups and despot leaders and governments to operate within their borders to feed and save the people a complete friggin hypocritical sham. They run their own money laundering cycle and tax evasion scams which are perpetuate and are clearly created to control entire population by some how making them believe “Democracy” can be obtained by Taxing everybody else because it’s their fault the world is suffering. Yet their HQ’s are set up in and run by enormous and plush administrative arms living well tucked safely away in these same G7 nations whilst mayhem and chaos reigns. supreme. Yet oddly enough some of their top backers and supporters pay no tax whatsoever. Pure Bullshit

    • Anonymous says:

      If this law is approved companies in Delaware will have a 15% corporate income tax rate too.

      • Anon says:

        I very much doubt that. They all look after their own and how much has Biden got secretly locked up in Delaware onshores…?

        • Anonymous says:

          8:23 Hey you ignorant turtle man, the US has banned shell companies within its borders. Biden can’t have secret accounts in Delaware as you say. I’ve read some dumb posts, but you take the cake.

          The U.S Senate on Friday passed a bill overhauling anti-money laundering rules and banning anonymous shell companies, a victory for law enforcement and rights groups which have long sought changes to make it easier to police illicit money flows.

      • Anonymous says:

        Wrong, it’s multinational companies with a profit rate above 10%.

        Simply never make a profit, invest or buy back your own shares.

        It’s all a con

        • Anonymous says:

          If they never make a profit, do you think there will be any demand for their equity securities? The proposed global tax is on “book income”, not “tax income”. Buying back your shares is not an income statement expense that will reduce book income. It’s not as easy to avoid as you say. You clearly don’t know what you’re talking about.

  11. Anonymous says:

    Another Liberal pipe dream that won’t make it through the United States Congress. Don’t lose any sleep over this announcement… it’s dead on arrival.

  12. Anonymous says:

    Unfazed or dumbfounded and have no clue how to react?

  13. Anonymous says:

    Of course these early pronouncements generate saucy headlines, but in practice, the cost of business can be re-engineered so that the 10% profit margin is never achieved and the 15% tax is never triggered. Also keep in mind that the reason corporations move elsewhere is because of the volumes of post-WW2 bad tax policy that are now entrenched in the G7 tax codes. They are the ones who have created and repelled their captains of industry. The planet forgets that pre-war there were few taxes assessed or paid anywhere! Govts do not wield the right to tax and spend badly or forever, and they shouldn’t collectively pretend they do, or they should be replaced! Taxpayers should demand that their tax codes be simplified, with much closer scrutiny of habitually wasteful spending. A race to the bottom is the natural physics of capital – it will always flow where it is treated best.

  14. Anonymous says:

    Where is Trump when you need him?

    • Anonymous says:

      Right – the world needs the kind of uncertainty Trump brings to the global economy and geopolitical stability. Those things are great for business, so let’s bring back Trump? Brilliant.

    • Anonymous says:

      He is putting pants on backwards, closing blogs cause no one cares to read his drivel, and his named condos are selling for less than the average because no one wants to be associated with him. What a loser.

    • Anonymous says:

      He said goodbye to the circus..

    • Anonymous says:

      8:16 Maybe he can build Trump Tower Cayman. Be careful what you wish for.

    • Anonymous says:

      8:16 He’s on tour telling everyone how wonderful he is and how he saved the Senate from being dominantly controlled by Democrats

  15. Anonymous says:

    Wait, we have a government? Who knew?

  16. Hubert says:

    If this is ultimately approved, the Cayman Islands will still have hedge funds and tourism. Though expect to see downsizing with local law firms and accounting firms.

  17. Anonymous says:

    I am not sure any of those people we elected has the knowledge to deal with something like this. Dazed might be a better word to describe them.

    • Hubert says:

      6:11, Certainly Wayne Panton understands as he was with Walkers for many years dealing with these types of financial issues on a daily basis from a legal perspective.

      However, really is out of our hands now as bigger multilateral issues are involved and we are the minnows about to be eaten by the sharks.

    • Anonymous says:

      Not true. Both Wayne and Andre are experienced in this area.

      • Anonymous says:

        True, but 2 of 10 is not a majority, and the rest of the Ministers are their equal in a PACT government, and far superior in number of votes needed to pass legislation. Da wha ya get in a coalition of independents with no manifesto.

        • Anonymous says:

          So how many of the PPM members were versed in financial services…2 out of 10 as well..

          Stop disrespecting this Government and give these people a chance..None of the PPM came into office fully experienced..NONE

          This is why we Caymanians can’t get ahead because we are always trying to pull those down that are trying to do good for us..

          The old guard PPM is dead and the people want fresh faces and fresh ideas not the same old policies that the PPM of which is, if you don’t have any experience you can’t get the job..that is unless I getting a little something on the side..

          Give the people a chance, they barely been in 6 weeks now and everyone is expecting them to fix everything within the first month of office ..

    • Anonymous says:

      I agree. They will need to have another retreat where it will be ‘splained’ to them, which the majority of them will not understand, and then they can issue a statement.

      • Anonymous says:

        8.53 ..and if I said ‘fishpot’ to you, you would have to Google it or have it explained to you. They don’t all have to be experts in financial services to be be a Member of Parliament.

  18. Anonymous says:

    clock is ticking on our ‘financial services’ product…
    time to at least think about plan b…..

    • Anonymous says:

      thumbs down to plan b…..?????
      welcome to wonderland.
      national pastime: stick their heads in the sand.

      • Anonymous says:

        No, just thumbs down to your child-like grasp on what the financial services industry does here.

  19. Cig says:

    It’ll be interesting to see how this affects work permit fees.

  20. Anonymous says:

    You think Emeritus President Trump would
    Ever all this? Ever ? Think about it !

  21. Anonymous says:

    Prepare to pay your taxes.

    • Anonymous says:


    • Anonymous says:

      I just did, finished a house and paid an “infrastructure fee” of almost six figures yet I live in a private community. I would not mind if I knew this was dedicated to education or actual infrastructure but sadly it goes into the CIG blackhole.

      • Anonymous says:

        “Infrastructure” goes beyond your doorstep, gates and private streets.

        Not that I would expect you to understand based on the idiocy that you wrote @8:28am.

  22. Anonymous says:

    This will have no impact on the investment funds or insurance industries. None.

    Might impact the odd holding company that a non financial services operations company might set up here, but that is a tiny part of what is done here.

    This really is nothing for Cayman to worry about.

  23. Anonymous says:

    PACT are deer in the headlights right now! No clue what to do.

    • Anonymous says:

      What would you want them to do, oh wise one? There is absolutely nothing they can do.

    • Anonymous says:

      Thanks for your opinion, PPM troll.

    • Anonymous says:

      There is literally nothing to do. Cayman is set up to accommodate this. Please try to educate yourself on topics before you comment; you sound like a fool, and your ancestors would probably be embarassed.

  24. EYES WIDE SHUT says:

    Is the PACT as bad or in denial as the PPM led UNITY government?
    This is major news and will have consequences for Cayman. There must a sensible strategy devised by industry and CIG working together to safeguard the financial services industry.

    • Anonymous says:

      Not major news, this will never get through the US Senate and will require the renegotiation of existing tax treaties. Also , Ireland will never agree, so its future implementation is highly unlikely.

    • Anonymous says:

      Maybe they just do not wish to tell YOU just yet.

  25. Anonymous says:

    I wouldn’t imagine the City of London will be stopping it’s money laundering Ponzi scheme anytime soon

    • Anonymous says:

      You know laundering and Ponzi schemes are entirely different, right? Why don’t you just chuck in some other terms, like proliferation or terrorist financing? Sure there’s plenty of laundering going on through London, but if you think we are squeaky clean you are nuts.

      • Anonymous says:

        Wow, sensitive are we!!!!! I don’t see anywhere in the post where is says “ We are squeaky clean”. Seems a little honesty rubs you the wrong way. Yes my friend, London also has dirty little fingers…

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