In previous updates we have alerted clients to the introduction
of Cayman Islands regulations1, which give effect to the
automatic exchange of tax information principles established by the
US and UK intergovernmental agreements (the "Cayman US
Regulations" and the "Cayman UK
While many Cayman Islands entities will be well prepared for the
commencement of the account due diligence and related reporting
obligations, we understand that some clients have been focused only
on the requirements in the Cayman US Regulations, principally
because of the related withholding tax that arises for
non-compliance. The Cayman UK Regulations deal with "UK
FATCA" requirements and there are additional key dates which
should be noted in calendars for UK FATCA compliance purposes.
The Cayman Islands government, along with around 50 other
countries, has also committed to the implementation of the OECD
Standard for Automatic Exchange of Financial Account Information
– Common Reporting Standard (the
"CRS") by the end of 2015.
We expect legislation to be introduced in Cayman during 2015 to
implement the CRS. The United States has, so far, not joined
the CRS initiative given the extensive network of intergovernmental
agreements it has already signed up. The CRS is similar to UK
FATCA in terms of account due diligence and related reporting
requirements. Like UK FATCA, there is no underlying
withholding tax regime.
As this is a continually evolving area of law in the Cayman
Islands, we have set out in this update the current anticipated
timeline with key dates under the Cayman US Regulations (which give
effect to the US IGA), the Cayman UK Regulations (which give effect
to the UK IGA) and the CRS2.
1 The Tax Information Authority (International Tax
Compliance) (United States of America) Regulations, 2014 and the
Tax Information Authority (International Tax Compliance) (United
Kingdom) Regulations, 2014.
2 The timeline relates to entities that were in
scope as Reporting FIs on or prior to 31 December 2014.
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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