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5.4. Tax Base for Non-Resident Entities

Non-resident entities operating in Cook Islands through a permanent establishment ('PE') are subject to tax on income sourced from Cook Islands. Non-resident entities deriving income from the source in Cook Islands without a PE are subject to withholding tax on their income.

Income derived by a non-resident person (including a company) from services (including professional services) rendered in the Cook Islands are exempt from tax in the Cook Islands if the following 3 conditions are met:

  • the person is present in the Cook islands for a period or periods not exceeding in the aggregate 30 days during the relevant tax year;
  • the income, being exempt in the Cook Islands, is chargeable in the country of residence of the recipient to any tax which is substantially similar in nature to the Cook Islands income tax; and
  • the services are performed for or on behalf of a person who is not resident in the Cook islands.