On October 29th, 2014 in Berlin, Germany, the Cayman Islands and
50 other jurisdictions signed on to the OECD Multilateral Competent
Authority Agreement ("MCAA") for the implementation of
the automatic exchange of tax information, based on the OECD's
Multilateral Convention on Mutual
Administrative Assistance in Tax Matters ("Multilateral Convention").
The MCAA requires the Competent (Tax) Authorities of
participating jurisdictions to collect and automatically exchange
tax information prescribed by the OECD's Common Reporting
Standard ("CRS"). The MCAA is similar in form
and substance to the U.S. and U.K. intergovernmental agreements
Cayman Islands Reporting Financial Institutions
("RFIs") such as hedge funds, private equity funds, and
securitization special purpose vehicles, will now have
substantially expanded international tax compliance obligations
starting in 2016. They will have broader and more detailed FATCA
reporting obligations pursuant to the U.S.-Cayman IGA, new
reporting obligations pursuant to the Cayman-U.K. IGA, and new due
diligence obligations under "GATCA" – i.e. Global
FATCA promulgated by the G20 and OECD.
The OECD website will publish the status of all Competent
Authorities compliance with the various MCAA requirements.
The following table indicates those jurisdictions which have signed
on to the MCAA and the other jurisdictions which have committed to
automatic exchange of tax information pursuant to the Multilateral
The MCAA will be activated when each Competent Authority
provides the OECD with confirmation that they have the necessary
legislation in place to implement the CRS and have specified the
relevant effective dates with respect to Preexisting Accounts, New
Accounts, and the application or completion of the reporting and
due diligence procedures. The Cayman Islands has already
implemented The Tax Information Authority (Amendment) (No.2) Law,
2014 on June 26th 2014 together with various International Tax
Compliance Regulations on July 3rd 2014 to enable the automatic
exchange of information for tax purposes with other Competent
In summary, the TIA and the other Competent Authority must
Specify the methods for data transmission including encryption,
any safeguards for the protection of personal data and confirm that
it has in place adequate measures to ensure the required
confidentiality and data safeguards standards are met.
Provide a list of the Jurisdictions of the Competent
Authorities with respect to which it intends to have the MCAA in
effect, following national legislative procedures (if any).
Steps to Compliance
RFIs, their service providers and professional advisors should
closely monitor the OECD and TIA websites and announcements
regarding these new international tax compliance obligations to
ensure the necessary legal and operational changes are made
Financial institutions' due diligence obligations under
FATCA and the U.S. IGAs commenced on July 1, 2014 and their first
reporting is due in 2015. According to the OECD, the U.S. will
honor its automatic exchange of information obligations under
reciprocal IGAs in 2015. The U.K. IGA due diligence obligations of
financial institutions resident in U.K. Crown Dependencies and
Overseas Territories also commenced on July 1, 2014 and their first
reporting is due in 2016. The following timetable distinguishes
which jurisdictions have commitments under the MCAA or the
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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.
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