The Cayman Islands Tax Information Authority (TIA), on
December 8, 2015 provided the following implementation updates for
the Common Reporting Standard (CRS):
Updated Self-Certification Forms (
Entity) for compliance with CRS, U.S. and U.K. FATCA, which
should be used by Cayman Islands funds. From January 1 onwards, a
Self-Certification Form needs to be obtained in the account opening
process and validated as quickly as possible. If no
Self-Certification Form is obtained within 90 days of the account
opening, the account must be reported to the TIA as undocumented.
If an entity/fund has a disproportionate number of undocumented
accounts, it may be subject to compliance reviews by the TIA.
A list of CRS
Participating Jurisdictions has been published. CRS includes a
so-called "look-through" provision, which requires a
Cayman Islands Reporting Financial Institution to treat investment
entities in Non-Participating Jurisdictions as Passive NFE and
determine if that investment entity is controlled by natural
persons that are residents in a Participating Jurisdiction so that
these accounts would become reportable. Please note that the U.S.
is not a Participating Jurisdiction.
Limited life debt investment entities
(LLDIEs) were included in the category of Cayman Islands
Non-Reporting Financial Institutions for CRS.
U.K. FATCA will be phased out by
2017. Due to the overlap between U.K. FATCA and CRS, it is
anticipated that the first CRS return, which is due by May 31st,
2017, will include supplementary information to satisfy U.K. IGA
requirements so that no separate return for U.K. FATCA would be
required. The Alternative Reporting Regime will only be available
for 2014 and 2015.
CRS Guidance Notes will be published
in Q1 2016, but will be limited to practical aspects of CRS that
are specific to the Cayman Islands.
The second part of the FATCA
regulations which will include penalties, enforcement, etc. is
expected in Q1 2016.
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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