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Business Taxation in Turks & Caicos Island
 
 
 

General

Turks & Caicos Islands is a tax neutral jurisdiction. There are therefore no income or capital gains taxes. Corporations, whether or not resident or carrying on business in the Islands, are not subject to any form of taxation on income or gains. The only form of direct taxes imposed on any person or corporation are customs excise duty on the importation of goods into the Islands and ad valorum stamp duties on the consideration passing on the sale of real estate.

In addition to enjoying the benefits of being incorporated in a tax neutral jurisdiction, an International Business Company (exempt company) is provided, on incorporation, with a written guarantee by the Governor, on behalf of the Government of the Islands, that the IBC will not be liable for a period of 20 years to pay any taxes that may be imposed in the future. Liquidations or reorganisations do not give rise to any tax implications in the Islands. An exempted company may transfer to another jurisdiction if such a transfer is not prohibited by the other jurisdiction.

An 8% stamp duty is also imposed on the consideration passing on the transfer of shares of companies holding land in the Islands and a nominal duty on the consideration on the transfer of shares in a domestic company.

Taxable Income

Shareholders of Turks & Caicos Islands corporations (whether corporations or individuals) are not subject to taxation in the Islands on income or gains arising from holdings in foreign corporations.

There is, however, a system of National Insurance contributions and National Health Insurance contributions.

Under the National Insurance Ordinance 1991, every person gainfully occupied in Turks & Caicos Islands either as an employed or self-employed person is insured. The scheme is funded through contributions by employers and employees and self-employed persons. In the case of employed persons other than public officials, the rate of contribution is 8% of earnings, 4.6% payable by the employer and 3.4% by the employee. For public officials, the contribution rate is 6.5% of earnings, 4.025% of which is payable by the employer. For a self-employed person, there is a flat rate contribution of 5.5% of earnings. No contribution is payable on any part of earnings exceeding $600 per week in the case of a weekly paid employee or $2,600 per month in the case of a monthly paid employee.

Similarly, under the National Health Insurance Ordinance 2009, every person gainfully occupied in Turks & Caicos Islands either as an employed or self-employed person is insured. Again the scheme is funded through contributions by employers and employees and self-employed persons. In the case of employed persons, the rate of contribution is 2.5% of earnings up to $7,800 per month for both the employee and employer. In the case of a self-employed person, there is a flat monthly rate of $250 per month unless the self-employed person provides evidence of their monthly earnings that support paying a reduced rate.

Tax Incentives

The absence of direct taxation has encouraged the use of Turks & Caicos Islands companies for a variety of purposes. The Islands have introduced legislation designed to encourage the continued growth of the jurisdiction as an offshore finance centre.

Exemptions from Customs and Excise and land transfer duties as well as concessionary rates on the use of Crown land are among a wide range of other incentives for the encouragement of development available for approved projects.

Foreign Tax Relief

Turks & Caicos Islands has signed numerous tax information exchange agreements (TIEAs). The Turks and Caicos Islands has therefore reached the agreed standard set by the Organisation for Economic Co-operation and Development (OECD) for inclusion on the 'white list' representing a major endorsement of Turks & Caicos Islands as a transparent financial centre.

Value Added Tax (VAT)

There is no sales tax or similar in Turks & Caicos Islands.

 

 
 

 



 


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