On March 19, 2015, the Cayman Islands Tax Information Authority
("TIA") officially opened the Cayman Automatic Exchange
of Information ("AEOI") Portal.
Please click here for a copy of the communication and
below for KPMG's comments on the Reporting and Notification
The TIA indicated that the Portal is now available for Cayman
Islands Reporting Financial Institutions ("Cayman Reporting
FIs") to submit their Notification (due by April 30, 2015) and
Reporting (due by May 31, 2015) to the TIA. Refer to the "Key
Dates in 2015" section below for details required to be
submitted as part of the Notification process.
Critically, the TIA has removed the NIL return reporting
requirement for Cayman Reporting FIs. To clarify, no US or UK
FATCA "nil returns" are required to be filed. For
many Cayman FIs they may not have anything to file. The TIA
has however noted that the Portal will accept NIL returns.
We note that the Office of the Chief Counsel at the IRS has
stated that submitting a NIL return is "best practice"
and that it intends to use non-filing for three consecutive years
as an indicator of possible noncompliance. As the process to submit
a NIL return is straightforward we expect some Cayman Reporting FIs
will decide to file a NIL return annually. This will also likely be
a key decision prior to liquidating any Cayman FI in an effort to
close out any possible obligations.
Notification process is still required
TIA's announcement on March 19, 2015 also noted that
even if a Cayman Reporting FI has no reporting requirements it must
notify TIA by April 30, 2015.
Why was this change made by TIA to remove the NIL return
requirement? We believe the decision by TIA to
remove the "Nil Return" filing requirement was
significantly influenced by the fact that the OECD Common Reporting
Standard ("CRS") which comes into force in 2017 does not
require "Nil Returns" to be filed as well as a similar
decision made by UK tax authorities on March 11, 2015.
KPMG Cayman can assist with the Notification process including
submitting the notification to the TIA on your behalf as well as
filing the U.S. FATCA Return for your Reporting FI(s) for 2015.
Please contact us for further details.
KPMG in the Cayman Islands has a FATCA Help Desk for any
questions you may have.
Key Dates in 2015:
How can we help?
KPMG in the Cayman Islands offers the following services to
assist you in your preparations for FATCA:
We can provide a detailed written summary of FATCA's impact
to a Cayman Islands Financial Institution.
We can review the FATCA policies you have implemented providing
recommendations on improvements.
We can conduct a review to ensure the process implemented
remains appropriate in face of changing legislation and upcoming
requirements including the OECD Common Reporting Standard
here for more details on KPMG in the Cayman Islands' FATCA
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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