The CRS is the standard for automatic exchange of financial
account information developed by the OECD which provides for
systematic and periodic automatic exchange between governments of
such information reported by financial institutions. In summary,
for holders of interests in certain Cayman Islands entities or with
Cayman Islands accounts, information on their shareholding or
account balance will be transmitted to their home tax jurisdiction
through the reporting required should such home tax jurisdiction
have agreed to comply with the CRS.
The Cayman Islands is one of 61 countries that have agreed to
implement CRS with more than 30 countries expecting to follow
shortly. Cayman Islands entities will comply with CRS by reporting
their information to the Cayman Islands Tax Information Authority
Further to our previous advisory CRS: Preparing for 31
December 2015 and Beyond, the TIA has announced that the CRS
Regulations have been published and enacted into Cayman Islands
law. The first schedule to the CRS Regulations is the CRS
itself (or more specifically the Common Standard on Reporting
and Due Diligence for Financial Account Information) and it
comes into force in the Cayman Islands on January 1, 2016.
The second schedule sets out excluded/non-reportable accounts.
The Government has announced that these CRS Regulations are a
key component of the jurisdiction's implementation of
internationally agreed standards of such automatic exchange of
financial account information between governments and that
additional parts to the regulations, addressing compliance, will
follow later in the year.
The TIA has advised that the CRS Regulations may be found on the
Cayman Islands Department of International Cooperation website.
Cayman Islands Financial Institutions (including most investment
funds) affected by CRS should be actively taking steps to establish
policies and procedures to identify reportable accounts, apply due
diligence and maintain information for the appropriate time to
ensure compliance with CRS. The first priority is to ensure
accounting opening procedures or incorporations of affected Cayman
Islands vehicles on or after 1 January 2016 identify the relevant
applicant and capture the necessary information – procedures
in this regard should be reviewed now.
The first deadline as to notification to the TIA under CRS is
expected to be at the end of April 2017 with the first reporting
date being the end of May 2017.
For entities currently complying with FATCA, similar procedures
will apply for the CRS, but specific advice should always be taken.
Campbells will issue a more detailed note in due course.
A Cayman Islands Government working group is considering queries
on the guidance and self-certification forms. However, the
Government has advised industry not to delay in preparing for CRS
compliance until such guidance is issued as this guidance will not
be extensive, addressing only local issues, as official CRS
commentaries should be relied upon (which can be found on the
OECD's automatic exchange portal which gives comprehensive
information about the OECD and tax transparency, a link to which
can be found here: http://www.oecd.org/tax/automatic-exchange.)
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 the 9 September 2016 the MFSA issued feedback to its consultation of the 1 April 2016 in relation to intra-group loans.
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