On September 10, the Cook Islands Treasury released a statement on the integration of multinational companies into the islands' domestic tax system - New Tax Liabilities Guide.
The document includes a series of frequently asked questions about how and what international companies and their service providers need to know in order to meet the new tax due dates. It is planned that a subsequent update will provide information on the assessment of income, deductions and withholding liabilities.
The new tax liability requires international companies to register with the Revenue Authority and apply for an RMD (Removal of Tax Exemption) number.
Alternatively, the Revenue Office suggests that in most cases a local company will be hired by international companies to act as an agent to apply the RMD number and future tax liabilities (e.g. Cook Islands Licensed Trustee Company). Service providers must attach a letter confirming their appointment as an agent and that your customer identification information (KYC) and customer due diligence (CDD) procedures are being followed in accordance with the Financial Transaction Reporting Act 2017 and international standards such as CRS, FATF and FATCA.
Companies that are not eligible for the transition period must apply for an RMD number within 28 days of registration, and the rest by January 1 of next year.
2019 amendments to the Cook Islands International Companies Law canceled tax incentives for such companies from December 17, 2019 and provided a transition period for existing companies until December 31, 2021. The transition period does not apply to income derived from assets acquired recently or new activities commenced after December 17, 2019 by existing international companies. Also, the transition period does not apply to companies registered after December 17, 2019.
