Cayman Islands Financial Services

The implementation of a pending tax agreement (TIEA) with the Cayman Islands has been announced by the Indian Income Tax Department. The TIEA will provide both tax authorities with access to tax information on request as soon as the agreement has entered into force. The document was signed on March 21, 2011.

The completion of India’s domestic ratification procedures with the publication of Notification 61/2011 in the nation’s official gazette means that the bilateral TIEA entered into force immediately, on December 27, 2011.

In accordance with the agreement that was negotiated on the basis of the OECD model agreement, Cayman or Indian authorities may request information pertaining to taxation where there is sufficient evidence of the perpetration of fiscal crime.

A tax information exchange agreement (TIEA) between the Cayman Islands and Japan will come into effect November 13, 2011 as the two governments have completed necessary domestic procedures.

On October 14, Japan notified the Cayman Islands of the completion of its internal procedures necessary for the entry into effect of the agreement. On the same date, the Japanese Embassy in the UK received a similar notification from the Cayman Islands.

The tax treaty was signed February 7 with a view to prevent international tax evasion between the Cayman Islands and Japan.

The British territory in the Caribbean is the 4th offshore tax haven that Japan has concluded such a treaty with. Previously, Japan signed tax agreements with the Isle of Man, the Bahamas, and Bermuda.

It has been announced by the Cayman Islands that the offshore jurisdiction has entered into an agreement on sharing tax information with China.

On September 26, the signing ceremony was held. At the event, the Cayman Islands’ Premier, McKeeva Bush said that signing this Tax Information Exchange Agreement is a significant step in enhancing the relationship between the Cayman Islands and China. He noted that China is one of the fastest growing economies in the world, so he expressed his confidence that this TIEA will contribute positively to economic activity between the two jurisdictions.

Bush said: “This is 26th signed agreement for exchange of information for tax purposes, and the People’s Republic of China has become another member of the G20 countries to have a TIEA with the Cayman Islands.”

Bush co-signed the agreement with Song Lan, the State Administration of Taxation Deputy Commissioner and Vice Minister. Both parties must conclude their individual ratification procedures before the agreement enters into force.

It has been announced by the government of Guernsey that a Tax Information Exchange Agreements (TIEA) was signed between Guernsey and the Cayman Islands.

Guernsey Chief Minister, Lyndon Trott expressed his delight to announce that, with the signing of the agreement with the Cayman Islands, Guernsey has signed its 1st TIEA with a Caribbean territory. The signing of the TIEA further underlines Guernsey’s ongoing commitment to the international standards of wider transparency and exchange of information in tax matters, as well as brings the number of countries which have signed TIEAs with Guernsey to 26.

In accordance with the terms of the agreement, the signatories will, on request, exchange bank and other information relating to both criminal and civil tax matters.

On June 1, 2011, the Tax Information Exchange Agreement (TIEA) signed between Canada and the Cayman Islands entered into force. The document was signed by the jurisdictions on June 24, 2010.

The treaty is applicable to taxes on income and taxes on capital in each territory. The TIEA provides for the exchange of information relevant to the administration of domestic tax laws, and to the collection of tax, and investigation or prosecution of criminal matters. It also permits the request of information held by banks and other financial institutions, and information relating to the ownership of companies, partnerships, trusts and foundations.

On March 21, A Tax Information Exchange Agreement (TIEA) that is designed to strengthen the commercial relationship between the Cayman Islands and India was signed by the 2 countries.

This is the 22nd agreement signed by the Cayman Islands. Premier McKeeva Bush said that the government of the Cayman Islands has a strong working relationship with Indian government, so the jurisdiction looks forward to implementing the terms of this TIEA.

On behalf of India, the document was signed by High Commissioner to the Bahamas, the Cayman Islands and Jamaica Mohinder S. Grover. He commented that both the Cayman Islands and India are members of the OECD Global Forum Global Forum on Transparency and Exchange of Information for Tax Purposes, therefore it is important to ensure the effective implementation of the international standards of transparency and exchange of information for tax purposes.

George McCarthy of the Cayman Islands International Tax Cooperation Team said that the TIEA “will provide a common ground upon which the Cayman Islands and India can exercise mutual cooperation and focus on increasing investment funds business in the Cayman Islands”.

A new Memorandum of Understanding (MOU) has been signed by the Cayman Islands with the jurisdiction’s neighbour Turks and Caicos Islands.

The agreement was signed on February 25 to formalize cooperation between the 2 Caribbean authorities, which had been informally occurring otherwise. The document provides for the exchange of information and investigative assistance between the Cayman Islands Monetary Authority (CIMA) and the Turks and Caicos Financial Services Commission (TCI FSC).

The MOU outlines the types of assistance that can be requested and given by CIMA and the TCI FSC including providing, confirming or verifying information; obtaining specified information and documents from other parties; discussing issues of mutual interest; arranging and/or conducting inspections of financial services providers; and permitting representatives of the requesting authority to participate in enquiries by or on behalf of the requested authority.

On behalf of the Turks and Caicos Islands, the MOU was signed by TCI FSC Managing Director, Mr. Kevin Higgins, who welcomed the development: “The FSC looks forward to working more closely with one of the premier regulatory agencies in the Caribbean.”

CIMA’s Managing Director Cindy Scotland said: “We are pleased to formalize methodologies of cooperation that has existed between CIMA and the Turks and Caicos Islands. We see this MOU as reinforcing our strong international cooperation regime and further demonstrating our commitment in this area.”

This Memorandum of Understanding is the 19th signed by the Cayman Islands Monetary Authority (CIMA).

The government of the Cayman Islands has announced expanding its network of Tax Information Exchange Agreements (TIEAs) with the signing of its 21st agreement.

The agreement was signed on February 7 between the Cayman Islands and Japan.

The document was inked at the Japanese Embassy in London. On behalf of the Cayman Islands, the TIEA was signed by the Cayman Islands’ Premier and Minister of Finance, McKeeva Bush, and, on behalf of Japan, it was signed by Hitoshi Noda, the Chargé d’Affaires ad interim.

Following the signing of the agreement, Bush commented that the development of the jurisdiction’s tax negotiation process is becoming increasingly valuable to the financial services sector. He noted that the signing of such an agreement with Japan provides benefits to both parties as well as signifies a new type of relationship.

It should be noted that the terms of this Tax Information Exchange Agreement include provisions for pensioners, students, government employees and residents of Japan, in that they will not be subject to double taxation.

In the end of January, the government of the Cayman Islands announced having entered into a Memorandum of Understanding to establish a free zone. The free zone to be established is to offer attractive terms to those who are aimed at making tax-efficient technology-based investments in the Caribbean and Americas region.

The MoU alloows creating a so-called enterprise city. The contractor, Hon Cayman Property Limited is expected to invest more than USD 500 million over 10 years.

The above-mentioned plans are to be approved by the Cabinet in March. After that, construction will commence at the beginning of 2012. It should be noted that the construction will provide 5 000 new jobs and local high-level training.

The government the Cayman Islands has accepted plans for the 300-acre zone to be partitioned into 6 specialized campuses, which will be as follows:
the Cayman Internet Park;
the CayBiotech, a Biotechnology & Research Park;
the Cayman Media Park;
the Cayman Global Commodities Centre (centralizing the global commodity market in Cayman);
the Cayman International Academic Park (a special economic zone dedicated to higher education);
the the Cayman Outsource Park.

On January 17, it was announced that the Cayman Islands has concluded negotiations for a tax information exchange agreement (TIEA) with Spain.

As a result, the authorities of Spain will no longer consider the jurisdiction as a tax haven once Spain signs a deal with the Cayman government.

The TIEA to be signed with Spain follows accord on several areas of common interest. The Ministry of Finance has revealed that the main outcome of the agreement will be Spain no longer classifying the Cayman Islands as a tax haven under its domestic legislation.

Cayman Islands Premier and Minister of Finance, McKeeva Bush said: “The conclusion of negotiations with Spain and the anticipated reclassification of the Cayman Islands under Spanish tax law represent significant progress in the Cayman Islands international tax transparency programme”. He added that Spain is a EU member state and a G-20 country, so, Cayman’s agreement fulfils the objectives of the negotiation strategy focused on concluding TIEAs with nations in these 2 groups.

It should be noted that the Cayman Islands has signed 20 bilateral arrangements for the provision of tax information. The Cayman Islands currently has 7 agreements awaiting signature, in addition to Spain. These are agreements with Italy, Japan, India, Greece, Indonesia, South Africa, South Korea.