Another round of International Tax Compliance Required under
the OECD's Common Reporting Standard
The Cayman Islands Department of International Tax Compliance
(DITC) has notified Cayman financial institutions of its intention
to move forward with implementing the OECD's Common Reporting
Standard (CRS), with the introduction of local regulations by
The Cayman Islands is among 50 "early
adopters" of the CRS that will begin the automatic exchange of
tax information starting in 2017. Eleven other countries will start
tax information exchange in 2018.
Under the CRS, as of September
2017, tax authorities in over 50 jurisdictions - in addition to the
U.S. and U.K. - will be entitled to information on accounts that
individuals or entities hold in a Reportable Jurisdiction, under
the tax laws of that jurisdiction.
A Reportable Jurisdiction is one
that has a multilateral or bilateral Competent Authority Agreement
with other jurisdictions to provide information under the CRS and
is on the OECD's list of such jurisdictions.
This DMS Alert
reminds stakeholders that all Cayman Islands investment
funds/financial institutions should now take steps to prepare for
reporting and other obligations under the CRS.
What should you do?
All accounts that exist on December 31, 2015 will be treated
as pre-existing accounts and must be documented as such.
Implement new account opening procedures as of January 1, 2016.
Perform due diligence on accounts, starting in 2016. Due diligence
procedures for identifying high-value pre-existing individual
accounts should be completed by December 31, 2016. For low-value
pre-existing individual accounts and for entity accounts due
diligence should be completed by December 31, 2017.
any administrative and/or IT systems development necessary for full
Stay abreast of developments on the Cayman Islands
Tax Information Authority's (TIA) Tax Information Assistance
website regarding CRS and other international tax compliance
Dates to Note:
January 1, 2016: CRS takes effect.
New investor onboarding procedures should be in place. Reporting
Financial Institutions (RFIs) will be required to provide
self-certification regarding tax residency.
April 30, 2017: Anticipated deadline
when RFIs are required to provide notification regarding their CRS
reporting status to the Tax Information Authority.
May 31, 2017: First reporting
deadline to the DITC with respect to relevant Reportable Accounts
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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On September 30, 2016, the VAT authorities confirmed that VAT shall apply to directors' fees.
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