Further to our prior client updates on the US Foreign Account
Tax Compliance Act ("FATCA"), we are
pleased to confirm that on 29 November 2013 the Cayman Islands
signed a Model 1(b) (i.e. non-reciprocal) intergovernmental
agreement with the United States ("USIGA").
The Cayman Islands government's release can be found
A copy of our general legal update on FATCA and the US IGA can
Although the US IGA has been executed, it will still need to be
brought into force in both jurisdictions in accordance with
applicable protocols, before coming into effect. Enabling
legislation is in the process of being drafted for the Cayman
Islands, which will assist in removing any issues of
confidentiality when complying with reporting requirements.
FATCA and Cayman Islands SPVs (including Cayman CLO
While the US IGA does not specifically address SPVs, Maples and
Calder has been assisting ISDA, LSTA and SIFMA with proposals to US
Treasury and the IRS to modify the Limited Life Debt Investment
Entity ("LLDIE") provision in the final
FATCA regulations. Copies of these proposals are available from
those industry bodies.
To the extent that such proposals, or variations thereof, are
adopted into any revisions to the final FATCA regulations, we have
confirmed with the Cayman Islands government that Cayman Islands
SPVs should be able to obtain the benefit of any amendment to the
LLDIE provision through the local legislation that will implement
the terms of the US IGA into Cayman Islands law.
The US IGA specifically contemplates the ability of the parties
to take the benefit of definitions in the relevant US FATCA
regulations (i.e. the final FATCA regulations as may be
Now that the US IGA has been signed, we expect legislation in
the Cayman Islands to implement the terms of the US IGA to be
drafted in the next two months.
One of the advantages of the Cayman Islands signing the US IGA
is that, to the extent a Cayman Islands SPV cannot be treated as a
certified deemed-compliant foreign financial institution
("FFI"), and is considered a Reporting
FFI, withholding agents are not required to verify a Global
Intermediary Identification Number
("GIIN") on payments made prior to 1
January 2015, where the payee is a Model 1 Reporting FFI.
Accordingly, Cayman Islands SPV's can effect registration
through to the end of 2014 and, if necessary, may self-certify
their status to withholding agents after 1 July 2014 to avoid
If registration is required, or if it is considered beneficial
for a Cayman Islands SPV to obtain a GIIN, our affiliate, MaplesFS,
has established a FATCA team and developed a suite of products over
the last two years to assist clients with their FATCA
The MaplesFS FATCA services include assisting with registrations
to obtain GIINs, classification of accountholders and accounts,
remediation and validation of Reportable Accounts, implementation
of new on-boarding procedures and reporting.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This webcast focuses on the impact FATCA and CRS are having on structured finance vehicles set up in the BVI, Cayman Islands and Ireland and covers in detail the impending reporting and notification deadlines in each of these jurisdictions.
On September 30, 2016, the VAT authorities confirmed that VAT shall apply to directors' fees.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).