Cayman Islands and Colombia to Sign TIEA
GEORGE TOWN, Grand Cayman–(BUSINESS WIRE)–The Cayman Islands and Colombia are to sign a Tax Information Exchange Agreement (“TIEA”) on 1 July 2014. The TIEA will be in accordance with global regulatory standards.
This will be Cayman’s 36th such agreement, the third in 2014, with the Seychelles agreement being signed in February and an agreement with Belgium signed in April. Negotiations are currently underway with an additional 14 nations.
The TIEA between Colombia and Cayman is notable, as through this agreement, Colombia has recognised that the Cayman Islands is a jurisdiction of such significant transparency and regulatory standards to order its removal from Colombia’s Tax Haven List (Non-Cooperative Jurisdictions). The two nations are both amongst those that have committed to the early adoption of the OECD’s Common Reporting Standard for automatic exchange of information, and are both members of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Insurance Managers Association of Cayman (IMAC) Chairperson Rob Leadbetter said: “We view Latin America, and Colombia in particular, as a solid market in the captive insurance space. This TIEA coming into effect reinforces Cayman as a viable option for Colombian companies looking for self-insurance alternatives as well as for investment funds and trusts. With only a handful of jurisdictions on this white-list, we are well-positioned to offer a valuable service to these companies.”
Nations on Colombia’s “Tax Haven List” are subject to transaction restrictions and tax penalties not applicable to ‘white-listed’ countries, including: a 25 per cent tax rate for portfolio investment proceeds as opposed to the 14 per cent tax rate applied to white-list domiciled entities; a 33 per cent withholding tax on any Colombian-sourced (taxable) income related payments made to individuals and corporations in tax haven jurisdictions; and transfer pricing compliance and anti-avoidance provisions applying to Colombian tax residents.
Business opportunities between the two nations are plentiful: Colombia is now the third freest economy in South/Central America, according to the 2014 Index of Economic Freedom, due to its increased focus on improved regulatory efficiency and enhanced financial sector competitiveness. The Cayman Islands is a world class international financial services centre, a position that has come from its active involvement in global regulatory initiatives, including its position as an OECD white listed jurisdiction and its Model-1 intergovernmental agreement regarding FATCA.
Insurance Managers Association of Cayman (IMAC) is a non-profit organisation run by the insurance managers of the Cayman Islands. In operation since 1981, IMAC’s aim is to act as both regulatory liaison with the Cayman Islands Government and to promote the Cayman Islands as a domicile of choice for captive insurance companies.
IMAC hosts the world’s largest captive insurance conference, attracting nearly 1,300 captive managers, service providers and directors annually.