Tax info sharing kicks in 2017
Come 2017, tax information on all foreign nationals holding bank accounts or other financial holdings in Cayman will be automatically shared with tax authorities in their home countries when the Mutual Administrative Assistance in Tax Matters convention kicks in.
Maples, in a Cayman Islands Automatic Exchange of Information update statement released last month, also highlighted tax information changes that were underway in Cayman.
The company noted that the CI Tax Information Authority advised that the UK Foreign Account Tax Compliance Act (FATCA) will be phased out in 2017. This means that all 2016 tax information related to UK residents i.e. bank accounts, investments, balances ecetera will automatically be shared with UK tax authorities by 2017.
That process has already begun under the US FATCA for American nationals.
Added to this in 2017 Cayman will begin the automatic sharing of tax information with some 96 signatory countries under the Mutual Administrative Assistance in Tax Matters convention.
Next year the first phase of automatic tax information sharing process will begin with the 37 early adopter countries. Cayman is included in that initial group of countries.
This essentially means any foreign national who is subject to tax in their home country that is a party to the convention will automatically receive tax information related to that individual.
Financial Services Minister Hon Wayne Panton said the intention is to send a clear signal to anyone who may be considering using Cayman to evade taxes, hide the proceeds of serious fraud, corruption or illegal activities that they are not welcome.
“We are saying that if that happens we are not going to allow that to happen we are going to share information and we are going to collaborate in the prosecution of individuals involved and that message will hopefully lead to a perspective that the Cayman Islands is not a jurisdiction in which that should be done (by) anybody should be considering using or utilising our legal structures in any way to achieve that,” Mr Panton said.
Duncan Nicol, Director of the Department for International Tax Cooperation said through the multilateral convention Cayman-based institutions will be subject to the Common Reporting Standard (CRS) for tax information and that information is nothing different from what an individual should have been reporting to their home country’s tax authorities.