| TURKS & CAICOS |
| KnowYourCountry |
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Since 1994, the PKF network of independent member firms, which is administered by
PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG). The
report below is extracted from the 2010 WWTG and reproduced with the kind permission of
PKF International Limited. Before continuing, please read the Important Disclaimer below.
________________________________________________________________________
IMPORTANT DISCLAIMER:
This report should not be regarded as offering a complete explanation of the taxation matters that are
contained within this report.
This report has been made available on the express terms and understanding that the publishers and the
authors are not responsible for the results of any actions which are undertaken on the basis of the
information which is contained within this report, nor for any error in, or omission from, this report.
The publishers and the authors expressly disclaim all and any liability and responsibility to any person,
entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of
the contents of this report.
Accordingly no person, entity or corporation should act or rely upon any matter or information as contained
or implied within this report without first obtaining advice from an appropriately qualified professional
person or firm of advisors, and ensuring that such advice specifically relates to their particular
circumstances.
PKF International is a network of legally independent member firms administered by PKF International
Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility or
liability for the actions or inactions on the part of any individual member firm or firms.
________________________________________________________________________
PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG). The
report below is extracted from the 2010 WWTG and reproduced with the kind permission of
PKF International Limited. Before continuing, please read the Important Disclaimer below.
________________________________________________________________________
IMPORTANT DISCLAIMER:
This report should not be regarded as offering a complete explanation of the taxation matters that are
contained within this report.
This report has been made available on the express terms and understanding that the publishers and the
authors are not responsible for the results of any actions which are undertaken on the basis of the
information which is contained within this report, nor for any error in, or omission from, this report.
The publishers and the authors expressly disclaim all and any liability and responsibility to any person,
entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of
the contents of this report.
Accordingly no person, entity or corporation should act or rely upon any matter or information as contained
or implied within this report without first obtaining advice from an appropriately qualified professional
person or firm of advisors, and ensuring that such advice specifically relates to their particular
circumstances.
PKF International is a network of legally independent member firms administered by PKF International
Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility or
liability for the actions or inactions on the part of any individual member firm or firms.
________________________________________________________________________
A. Taxes payable
Federal taxes and levies
Company tax
The Turks and Caicos Islands are a tax neutral jurisdiction. There are, therefore, no
income or capital gains taxes. Corporations, whether resident or not 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
duties 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 (IBC/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.
B. Determination of taxable income
Shareholders of Turks and Caicos 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 the Turks and 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 US $600 per week in
the case of a weekly paid employee or US $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 the Turks and 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 US $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 US $250 per month unless the self-employed
person provides evidence of their monthly earnings that support paying a reduced rate.
Incentives
The absence of direct taxation has encouraged the use of Turks and Caicos 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.
C. Foreign tax relief
The Turks and Caicos Islands have 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 the Turks and Caicos Islands as a transparent financial centre.
_________________________________________________________________________________________________________________
Federal taxes and levies
Company tax
The Turks and Caicos Islands are a tax neutral jurisdiction. There are, therefore, no
income or capital gains taxes. Corporations, whether resident or not 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
duties 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 (IBC/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.
B. Determination of taxable income
Shareholders of Turks and Caicos 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 the Turks and 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 US $600 per week in
the case of a weekly paid employee or US $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 the Turks and 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 US $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 US $250 per month unless the self-employed
person provides evidence of their monthly earnings that support paying a reduced rate.
Incentives
The absence of direct taxation has encouraged the use of Turks and Caicos 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.
C. Foreign tax relief
The Turks and Caicos Islands have 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 the Turks and Caicos Islands as a transparent financial centre.
_________________________________________________________________________________________________________________
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20 September 2011 - Peer review report
focusing on legal frameworks which allow for
transparency and exchange of tax information
now available.
Key Findings:
Luxembourg has negotiated a number of EOI
agreements to the standard in the last two
years and can access information held by
Luxembourg banks in order to respond to
requests from foreign authorities. As regards
the availability of information, the legal
framework does not ensure that ownership
information relating to companies is available in
all circumstances. The legislation ensuring the
availability of bank information should also be
strengthened.
To view report click here
______________________________________
focusing on legal frameworks which allow for
transparency and exchange of tax information
now available.
Key Findings:
Luxembourg has negotiated a number of EOI
agreements to the standard in the last two
years and can access information held by
Luxembourg banks in order to respond to
requests from foreign authorities. As regards
the availability of information, the legal
framework does not ensure that ownership
information relating to companies is available in
all circumstances. The legislation ensuring the
availability of bank information should also be
strengthened.
To view report click here
______________________________________
| Last Updated: 15 April 2012 |