The government of the Cook Islands has announced that expiry dates for the claiming of 100% depreciation deduction on assets entering the country have been set for the end of the year.
According to the Revenue Management Division of the Ministry of Finance and Economic Management (MFEM), the cabinet wishes to introduce legislation at the next parliament session that will amend the Income Tax Act.
Under these changes, the deduction will be discontinued on new assets acquired after 31 December for assets principally used in Rarotonga.
However, the deduction will still be permitted for new assets used in the outer islands for a further five years from 2005 to encourage further development.
The tax break was first introduced in 1997 in a bid to encourage investment and economic growth.
A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp
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