Archive for the ‘Cayman taxation’ Category

Cayman Government promises no new taxes

Friday, June 8th, 2018

Cayman Finance Minister Roy McTaggart told a recent Chamber of Commerce economic forum that no “coercive revenue measures” will be introduced during the Cayman Government’s term in office, which ends in 2021.

The Minister said that the undertaking was intended to give the private sector comfort, certainty and confidence.

McTaggart also noted that the government of the Cayman Islands is committed to reducing taxes in areas that will promote economic growth, as well as to reducing the cost of doing business and the cost of living for residents.

Cayman Islands argues Tax Haven title

Sunday, October 29th, 2017

Jude Scott, CEO of the Cayman Islands’ financial services promotion agency, Cayman Finance, has decided to aim at a report labeling the territory as a “tax haven.”

Besides labelling as “tax haven”, the report on international financial centers, issued by the non-profit US Public Interest Research Group and the Institute on Taxation and Economic Policy, criticizes the jurisdiction for being slow to release private financial records and facilitating financial secrecy.

As to the criticism leveled at the territory, Scott noted that, not only is the Cayman Islands “transparent,” it has adopted more than 20 global financial standards and adheres to both the US FATCA rules and the OECD’s Common Reporting Standard.

“We meet none of the descriptions used by entities such as the OECD or Transparency International to define a tax haven. In fact, our system purposefully lacks any laws or regulations like double taxation treaties or foreign incentives that support the shifting of a tax base by foreign entities to avoid corporate taxes in their home jurisdictions,” said Scott.

“Reports such as this conveniently overlook how international finance centers like the Cayman Islands observe their commitment to global standards for transparency and cross-border information sharing with law enforcement and tax authorities,” added Scott.

Scott emphasized that the legislation and regulations adopted by the Cayman Islands make the jurisdiction a strong international partner to address any concerns.

Cayman has the Least Complex Tax Jurisdiction worldwide

Wednesday, August 2nd, 2017

In accordance with TMF’s Financial Complexity Index 2017, the Cayman Islands is the least complex jurisdiction as regards taxation and accounting requirements.

TMF’s Financial Complexity Index 2017 ranks 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific, and the Americas. The Cayman Islands is ranked 94th, which means that this territory has simplified tax reporting requirements and has low rates of tax.

Other least complex jurisdictions are Jersey (90th), Hong Kong (91st), the UAE (92nd), and the BVI (93rd).

The most complex jurisdictions are Turkey (1st), Brazil (2nd), Italy (3rd), Greece (4th) and Vietnam (5th).

US treasury secretary nominee advised to eliminate Cayman Islands and other tax havens

Wednesday, January 25th, 2017

When questioning the new Trump administration nominee for Treasury Secretary, members of the US Senate, asked Steve Mnuchin how he intends to close down Caribbean tax havens, specifically naming the Cayman Islands.

The senators focused upon the Cayman Islands in showing their displeasure of what they clearly indicated was abuse of American tax laws.

Details have recently emerged how financial service professionals working in the Cayman Islands intentionally use combinations of jurisdictions, like forming a BVI company, owned by a Belize trust, to create a totally opaque, non-transparent vehicle, tax-free, with no identifiable beneficial owner.

After the Panama Papers scandal, members of the Senate and the House of Representatives have affirmed the immediate need for effective tax reform, whether through new legislation or Treasury regulations, to eliminate the present situation. They appear to be looking for the incoming Treasury Secretary for a solution. Political pressure is clearly present on this matter.

Cayman listed as 2nd worst tax haven

Tuesday, December 13th, 2016

The Cayman Islands has been listed as one of the worst corporate tax havens in the world in a new report examining the impact that tax-dodging corporations have on the world’s poorest people. Published by the international charity Oxfam, the report lists Cayman in second place behind Bermuda because of the zero-rated corporate income tax and what the charity said is a lack of cooperation with international efforts against tax avoidance.

But Oxfam stated in the report that there is a destructive race to the bottom on corporate tax.

Also, it said that the growth in the use of tax havens means countries are finding it harder and harder to tax income from capital. Government coffers are declining and the burden of tax has shifted toward poorer workers and small businesses and away from powerful conglomerates and the world’s high net worth individuals.

Oxfam names on-shore countries as well as offshore financial centres, such as Cayman and Bermuda, but the charity is calling on world governments and corporations to facilitate much more transparency over who owns what and who pays tax where on their earnings and profits. The charity also raised concerns that in the country-by-country reporting between government authorities the information is still not public. This means developing countries cannot access the data.

Responding to this latest critical report, Financial Services Minister Wayne Panton accused Oxfam of making errors on its list and of exploiting misinformed public opinion, as part of an agenda to influence the public policy of G20 countries.

Panton said that the report “may be detrimental to the overall shared goal of combating criminal behaviour and addressing income inequality”. He claimed that Oxfam’s overriding error is their failure to differentiate between capital flows and profit shifting.

To engage in profit shifting, a jurisdiction must attract significant multinational corporations, or MNCs, he explained. “Cayman does not have this type of business. We do, however, receive capital flows that are used to the benefit of other jurisdictions, via investment projects”.

Cayman Finance, the local body representing the offshore sector, has described a recent Oxfam report on tax havens as “the same purposefully misleading rhetoric pretending to be research that Oxfam has published and republished for years”. Cayman Finance said the analysis was biased and “intentionally inaccurate and misleading information”, as it accused the global charity that has been helping the world’s poor and vulnerable people for well over 70 years of advancing an agenda and harming countries they do not ‘like’ in the process.

Cayman Finance CEO Jude Scott claimed that the Oxfam report was “alarmism” that was “unsupported by the facts”.

He said that international policymakers recognise the “vital role the Cayman Islands plays in the global economy”, as he advanced the idea that Cayman connects law-abiding users and providers of investment capital and financing around the world, which benefits both developed and developing countries.

“Oxfam continues to use a misleading and overly simplistic definition of what a tax haven is. Its assertion that a zero tax jurisdiction is a key criterion in defining a tax haven is simply not correct. Cayman Finance believes that any criteria used should be transparent, objective and meaningful,” Scott said. ‘Tax haven’ is a place providing shelter for illegal or inappropriate transactions and a jurisdiction that engages in practices that supports or conceals transactions relating to tax evasion, which is illegal. So, the Cayman Islands is not a ‘tax haven’, he said. “The Cayman Islands is an efficient and effective tax neutral jurisdiction that does not add additional taxes and has been recognised for decades as a strong partner in combatting global financial crime including money-laundering, terrorism financing, corruption and tax evasion. The Cayman Islands has gained the reputation of a transparent jurisdiction by meeting or exceeding globally accepted standards for transparency and cross border cooperation.” He said this jurisdiction provides a tax neutral platform that allows parties domiciled in countries that have differing laws, regulations, tax rules and customs to do business with each other.

Cayman tax haven holds more Japanese money than ever

Monday, May 30th, 2016

According to the Bank of Japan Japanese investments in financial securities in the Cayman Islands have hit a record high.

Those investments stood at a total value of about USD 675 billion as of the end of 2015, which is up about 20% from a year ago, the Bank of Japan statistics on international balance of payments showed on May 24.

The above-mentioned amount was more than double the corresponding figure at the end of 2005, and the largest ever since 1996, when comparative data became available.

This figure is the amount of money invested by Japanese companies, institutional investors and wealthy people in stocks and bonds of companies established in the Cayman Islands or in investment funds set up there.

The Cayman Islands is one of Japan’s 2 most favored overseas places for investments in securities, second only to the USA.

The statistics released by the Bank of Japan showed that the 74.4 trillion yen figure (USD 675 billion) is larger than the corresponding figures invested in France and Britain.

It is worth mentioning that some wealthy people in Japan who tried to hide their assets by using Cayman-registered companies or companies set up in other offshore centres have been notified by Japanese tax authorities that they have failed to declare income. “Among wealthy people, there are some who conceal their assets by setting up many paper companies and do not declare their incomes appropriately to Japanese tax authorities,” said Go Kawada, a former official of the National Tax Agency, who is now serving as an advisor to Yamada & Partners Certified Public Tax Accountants Co.

BNP Paribas to close business in Cayman Islands

Thursday, May 26th, 2016

French bank BNP Paribas plans to close its remaining business in the Cayman Islands, in the wake of the Panama Papers revelations about tax havens.

Campaign group Attac (the Association for the Taxation of financial Transactions and Aid to Citizens) cited the minutes of a May 3 meeting of the finance committee of the French bank’s central works council.

BNP did not provide comments on the report, but made an email statement to note that it had closed 2 subsidiaries in the Cayman Islands and currently had 2 branches there.

According to its annual report, the remaining branches are linked to the Bank of the West, BNP Paribas’ retail bank in the United States, and the corporate and institutional banking division of BNP Paribas.

The report comes a day before BNP Paribas Deputy Chief Operating Officer Jacques d’Estais is due to appear at a French Senate hearing relating to the Panama Papers, a collection of leaked data from Panama-based law firm Mossack Fonseca that put the spotlight on how the world’s rich use offshore tax regimes.

Earlier in May, the United Nations named the Cayman Islands and the British Virgin Islands as British tax havens that had received some USD 72 billion of company funds in 2015.

Small Cayman Island holds USD 265 billion in treasuries

Tuesday, May 17th, 2016

According to Bloomberg, a Caribbean financial centre favored by hedge funds is now the 3rd-biggest foreign owner of United States’ government debt.

More hedge funds are domiciled in the Cayman Islands than anywhere else in the world. According to data the US Treasury Department released on May 16, the Cayman Islands held $265 billion of Treasuries as of March, up 31% from a year earlier. It was the 1st time that the United States released details of bond holdings among OPEC and Caribbean countries, and it came in response to a Freedom-of-Information Act request submitted by Bloomberg News.

Bloomberg says that the stockpile makes this offshore tax haven the largest holder after China and Japan, which, being the world’s 2nd- and 3rd-biggest economies, each own more than USD 1 trillion of Treasuries.

About 60% of the world’s hedge-fund assets are domiciled in the Cayman Islands, according to a 2014 report by consulting firm Oliver Wyman & Co. The report also says that “a robust regulatory regime and no or low entity-level taxation allowed the Cayman Islands to build a long-lasting reputation as a global hedge funds hub”.

Number of Cayman-registered companies exceeds number of inhabitants in one building in Cayman

Wednesday, January 20th, 2016

Almost all the 20,000 Cayman-registered companies are listed at one 5-story office called Ugland House.

Another 80,000 companies are registered elsewhere in the British overseas territory.

It means that there are now nearly twice as many firms as island residents.

A BBC documentary crew has tried to shine a light into some of the Caymans’ dark corners. It reveals that, with GBP 1.5 trillion passing through the islands’ banks, the Caymans seem to offer a dream lifestyle. But in a place where a 4-bed home costs nearly GBP 2 million, one British couple who moved there revealed the reality of living in a tax-free state that generates income from import duties. Paula and Paul said that while they do not pay tax on their joint income of GBP 40,000, they pay over the odds at the supermarket, where fish fingers cost GBP 8.50 and Hello magazine is GBP 6.

Also, the documentary showed how hard life can be for the island’s natives, with inflated prices and no welfare state to fall back on. For example, retiree Emily, who lives with her daughter and three grandchildren, faces homelessness after struggling to pay a GBP 1,500 monthly mortgage on her decrepit home. Meanwhile, its wealthy residents are busy building luxury seafront homes with several swimming pools and flying their hairdressers over from Los Angeles.

President Obama once said Ugland House symbolised what was wrong with tax havens, saying of the block and its 20,000 firms: ‘Now, that’s either the biggest building or the biggest tax scam on record.’ There are nearly 20,000 companies registered in that building, but, looking through the window, one can see many desks but not a single person at any of them.

Italy removes Cayman from its Black Lists

Monday, April 6th, 2015

Italy has removed the Cayman Islands from its “black list” because the jurisdiction already has the Tax Information Exchange Agreement (TIEA) in effect.

On April 1, Italy’s Minister of the Economy and Finance, Pier Carlo Padoan, signed two decrees that modify Italy’s “black lists”. The two decrees follow the guidelines laid down in Italy’s 2015 Stability (Budget) Law. The Stability Law specified another black list under which expenses incurred in transactions with residents in a jurisdiction would not be deductible.

The “non-deductibility of costs” list now therefore includes 46 tax jurisdictions, while 21 including the Cayman Islands have been cancelled as already having TIEAs in effect. Also, Alderney, Guernsey, Jersey, the Isle of Man, Gibraltar, the British Virgin Islands, Anguilla, the Netherlands Antilles, Aruba, Belize, Bermuda, Costa Rica, the United Arab Emirates, the Philippines, the Cayman Islands, the Turks and Caicos Islands, Malaysia, Mauritius, Montserrat, and Singapore have been removed from the black list.