Cayman Islands Tax Information Authority v 1. MH
Investments, 2. JA Investments – CICA No. 31 of 2013;
The Court of Appeal in rejecting the appeal of the Tax
Information Authority against the decision of Mr Justice Quinn in
MH Investments Ltd and JA Investments Ltd1 has confirmed
in all respects that in seeking to rely on the provisions of any
tax information exchange agreement, a foreign tax authority, and on
its behalf the Cayman Islands Tax Information Authority, must
adhere strictly to the terms of the relevant agreement and the
Tax Information Authority Law.
Indeed, Mr Justice Quinn in his comprehensive judgment at first
instance, had pointed out that in the light of the Cayman Islands
Bill of Rights, the Court is led to apply "a more anxious
level of scrutiny and standard of review, just as the Human Rights
Act influenced the approach adopted by the Courts in England and
Wales". In the event the complete failure of the Tax
Information Authority to serve on a person who was the subject of a
request a notice advising of the existence of the request,
transpired to be the sole point on which counsel for the Appellants
advanced oral argument on appeal.
This challenge to paragraph 4 of Mr Justice Quinn's Order at
first instance failed comprehensively: the Court of Appeal found,
upholding Mr Justice Quinn, that no such notice was given to the
"person subject to the request". This fundamental flaw
prevented the respondent companies from making due application in
good time to challenge the validity of the requests for information
(or production notices, under the Law) issued by the Tax
Information Exchange Authority as the Law entitled them to do.
Subsequent revision to the legislation changing the identity of
the persons upon whom notice must be served does not adversely
affect the efficacy of the agreement but avoids any doubt as to the
correct procedure that must be followed by the Tax Information
Authority. What is clear from the Court of Appeal judgment is that
to obtain information that would otherwise be regarded as
confidential under Cayman Islands law through the mechanism of a
tax information exchange agreement requires strict compliance with
the terms of that agreement and the Law.
1. See Client Memorandum Tax Information Exchange and
the Cayman Islands Bill of Rights, Sept. 2013.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Common Reporting Standard (CRS) has been initiated by the Organization for Economic Cooperation and Development (OECD) aiming at improving international tax compliance and preventing tax evasion, through the automatic exchange of information between the countries that implement CRS.
An AIF-LNP can only be setup as a fixed or variable capital company or as a limited partnership and can only be marketed to well-informed and/or professional investors.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).