Most Read Contributor in Cayman Islands, September 2016
Representing a significant development in the Cayman
Islands' transparency framework, the OECD/Council of Europe
Convention on Mutual Assistance in Tax Matters has been extended to
the jurisdiction, and will become effective on 1 January 2014.
The UK is a party to the convention and, in accordance with
legal requirements, Cayman must formally request that the UK extend
the convention to this jurisdiction. The formal request was made in
August, said the Minister of Financial Services, Wayne Panton.
'For the continued vitality and growth of Cayman's
industry, it's an advantage to remain aligned with global
movements in the direction of automatic exchange of
information', Mr Panton said, noting that more than 50
countries currently adhere to the convention.
The convention is a multilateral instrument, designed to combat
tax evasion and aggressive tax avoidance by allowing member states
to assist each other in tax matters. Administrative assistance can
range from the exchange of information for tax purposes, to the
serving of documents.
With international instruments, it is common to allow signatory
countries to opt out of certain aspects. Regarding the OECD/Council
of Europe convention, Cayman will not handle matters related to
requests for the recovery of foreign tax claims, or exchange of
information regarding local taxes, and social security
contributions. The convention does not allow countries to opt out
of core elements regarding the exchange of tax information.
Recent milestones of Cayman's cooperation in global tax and
transparency matters include agreeing to participate in the G5
pilot on multilateral automatic exchange of information; and the
publishing, immediately following the June G8 Summit, of an action
plan on the misuse of companies and other legal structures, which
includes provisions on beneficial ownership.
To date, Cayman also has signed tax information exchange
agreements with 31 jurisdictions, and negotiations are either
completed, or underway, with a further 18 jurisdictions. Today, the
Cayman Islands also was the first Overseas Territory to sign a
FATCA-style intergovernmental agreement with the UK for automatic
exchange of information for tax purposes.
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