Cayman Islands: Year-End Obligations

Published date01 December 2022
Subject MatterTax, Tax Authorities
Law FirmMaples Group
AuthorMr Christopher Capewell, Patrick Head, Tim Dawson and Martin Livingston

As 2022 draws to a close, we take this opportunity to remind Cayman Islands entities of certain regulatory obligations and filing deadlines.

Economic Substance

'Relevant entities' carrying out 'relevant activities' for the purposes of the International Tax Co-operation (Economic Substance) Act (As Revised) (the "ES Act") during 2021, with their financial year end on 31 December, are required to file their economic substance return ("ES Return") with the Department for International Tax Cooperation (the "DITC") no later than 31 December 2022. As this deadline falls on a Saturday, we would advise clients to ensure completion of their ES Return filing ahead of the deadline by Friday, 30 December 2022 to avoid incurring penalties.

Under the ES Act, a late penalty filing fee of US$6,098 can be imposed together with an additional penalty fee of US$610 for each day an ES Return remains outstanding.

All Cayman Islands entities and foreign registered companies are required to file an annual economic substance notification ("ESN") in January prior to the filing of annual returns (discussed below). Generally filed by the entity's registered office, ESNs are due by 31 January 2023.

Annual Returns and Annual Fees

In addition to filing the ESN, Cayman Islands entities are also required to file an annual return and pay annual registration fees to the Registrar in January. The filing of annual returns and payment of annual fees is typically done by the entity's registered office.

From 1 February, an entity that has not filed its ESN and annual return nor paid its annual registration fee will be considered to not be in good standing unless and until these are submitted with penalties accruing from 31 March. The penalty is 33.33% of the annual fee payable by the entity for an annual return / annual fee submitted between 1 April and 30 June; 66.67% of the annual fee payable if submitted between 1 July and 30 September; and 100% of the annual fee payable if submitted between 1 October and 31 December.

To accommodate annual return filings, registered office fees for Cayman Islands entities are generally due annually on or before 31 December, 2022, including those for Maples Corporate Services Limited. Arrangements should be made to ensure payment of registered office fees promptly and prior to year-end, to facilitate the submission of statutory filings that may be due in January, 2023.

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