The Government is pleased that the Cayman Islands has not been included on the EU's updated list of non-cooperative jurisdictions for tax purposes (known commonly as the EU blacklist).

This was expected as the Cayman Islands has lived up to the December 2017 commitments made by the Government to implement legislation to introduce substance requirements for relevant Cayman entities; to remove the restriction on certain types of Cayman companies from conducting business locally; and to introduce additional accounting and regulatory requirements for Cayman entities.

We note that the EU has expressed concerns regarding economic substance requirements for collective investment vehicles (CIVs), known commonly as funds. The EU has acknowledged in its council conclusions published today that further work will be needed to define acceptable requirements for CIVs.

While the Government has committed to continuing its engagement and dialogue with the EU on this issue, it should be borne in mind that the global standard requiring economic substance for relevant financial and corporate entities, set by the OECD's Forum on Harmful Tax Practices, does not include CIVs.

As such, Cayman's legislation is based on the global standards, and we will continue to adhere to global standards with regard to economic substance requirements for relevant entities.

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.