The Cayman Islands Tax Information Authority (TIA), on December 8, 2015 provided the following implementation updates for the Common Reporting Standard (CRS):
- Updated Self-Certification Forms ( Individual and Entity) for compliance with CRS, U.S. and U.K. FATCA, which should be used by Cayman Islands funds. From January 1 onwards, a Self-Certification Form needs to be obtained in the account opening process and validated as quickly as possible. If no Self-Certification Form is obtained within 90 days of the account opening, the account must be reported to the TIA as undocumented. If an entity/fund has a disproportionate number of undocumented accounts, it may be subject to compliance reviews by the TIA.
- A list of CRS Participating Jurisdictions has been published. CRS includes a so-called "look-through" provision, which requires a Cayman Islands Reporting Financial Institution to treat investment entities in Non-Participating Jurisdictions as Passive NFE and determine if that investment entity is controlled by natural persons that are residents in a Participating Jurisdiction so that these accounts would become reportable. Please note that the U.S. is not a Participating Jurisdiction.
- Limited life debt investment entities (LLDIEs) were included in the category of Cayman Islands Non-Reporting Financial Institutions for CRS.
- U.K. FATCA will be phased out by 2017. Due to the overlap between U.K. FATCA and CRS, it is anticipated that the first CRS return, which is due by May 31st, 2017, will include supplementary information to satisfy U.K. IGA requirements so that no separate return for U.K. FATCA would be required. The Alternative Reporting Regime will only be available for 2014 and 2015.
- CRS Guidance Notes will be published in Q1 2016, but will be limited to practical aspects of CRS that are specific to the Cayman Islands.
- The second part of the FATCA regulations which will include penalties, enforcement, etc. is expected in Q1 2016.
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