On 29 November 2013, the Cayman Islands Government signed a
model 1B (non-reciprocal) intergovernmental agreement (US IGA) with
the United States to simplify the reporting process for Cayman
Islands entities under the United States Foreign Account Tax
Compliance Act (FATCA). The US IGA was just the
first piece of the complex legislative process required to allow
the Cayman Islands government and authorities to agree IGAs with
other governments (a similar IGA was signed with the UK Government
on 5 November 2013 (UK IGA)) and to implement the
terms of the IGAs into domestic legislation.
On 1 July 2014, the Tax Information Authority Law underwent
significant amendments to allow the Cayman Islands Tax Information
Authority (TIA) to automatically exchange
information with overseas tax authorities in compliance with the
terms of the IGAs (and any other relevant treaties).
Within days, the Tax Information Authority (International Tax
Compliance) (United States of America) Regulations, 2014 and Tax
Information Authority (International Tax Compliance) (United
Kingdom) Regulations, 2014 (Regulations) were
passed. The Regulations transpose the key definitions and operative
provisions of FATCA and the IGAs into Cayman Islands legislation.
The practical result is that financial or 'FATCA' reporting
compliance (aside from the requirement to register for and obtain a
GIIN from the IRS) for all Cayman Islands entities is now a
domestic rather than US or UK legal issue.
Completing the process, on 22 July 2014 the TIA issued its
Guidance Notes on International Tax Compliance. While the Guidance
Notes are not, strictly speaking, legislation, they provide useful
and practical assistance and should be treated as an essential tool
in understanding and complying with the Cayman Islands' FATCA
At more than 200 pages, the Guidance Notes provide detailed
analysis - including 'real world' examples - to assist
entities in determining whether or not they are impacted by the
Regulations and if so, how to comply. A detailed analysis of the
legislation and Guidance Notes is beyond the scope of this brief
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