Cayman Finance fully supports actions being taken by the Cayman Islands Government to constructively engage with European Union officials with an aim to reverse an EU decision to include the jurisdiction on a list of non-cooperative jurisdictions for tax purposes.
“The Cayman Islands has had a track record of meeting evolving global standards and that is expected to continue,” said Cayman Finance CEO Jude Scott. “As an organisation, we stand ready to work with government, as it sees fit, as it cooperates with the EU to be removed from the list. We anticipate this decision will happen in the not too distant future.”
Mr Scott noted that the Cayman Islands Government recently introduced modernised legislation that enhanced the oversight of investment funds. This was in response to an evolution in global regulations, primarily driven by the European Union and other global standard setting bodies.
“Just as approximately 30 other jurisdictions were removed after a taking the necessary actions, we look forward to the same happening with regard to the Cayman Islands. In the meantime, clients can continue to expect the usual high professional standards from their Cayman service providers that they have always received,” Mr Scott added.
He noted that as a premier global tax neutral financial hub, Cayman has adopted at least as many global standards for transparency as any G20 country – and more, when agreements specific to International Financial Centres (IFCs) and UK Overseas Territories are included.
The jurisdiction proactively shares tax information with more than 100 other governments under the Organisation for Economic Cooperation and Development (OECD) Common Reporting Standard. This assists those countries in the collection of taxes, regardless of what their unique tax laws are.
Cayman was recently rated by the OECD as largely compliant (the second highest of a six-tier rating) with the international standard for transparency and exchange of information – the same rating given to G20 countries like the USA, UK, Canada, Australia and EU member states Austria, Belgium, Denmark and Germany.
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In 2016, EU member state Italy included the Cayman Islands on a ‘white list’ of countries that cooperate with facilitating the exchange of tax information.
Within the past year, after a review of the Cayman Islands’ domestic legal framework that includes economic substance, the OECD found that the Cayman Islands tax neutral regime is not harmful and meets all economic substance requirements. The EU also came to the same conclusion, with the exception of the EU’s requirement for investment funds, which the government recently introduced new legislation to address.
With the full support of industry, Cayman Finance is confident that the Cayman Islands Government will take all necessary actions to address any remaining EU concerns in a timely manner to ensure removal from the list at the earliest possible opportunity.
The Cayman Islands Directors Association also noted it was “obviously disappointed by the recent EU decision to include the Cayman Islands on its list of non-cooperative jurisdictions for tax purposes. CIDA along with other private sector organisations have worked tirelessly along with the Government, to devise and implement relevant and effective legislation.
“As one of the world’s leading financial centres and a domicile of choice for investment funds, we are committed to continued cooperation and engagement on this issue. We remain optimistic that there will be fair play and proper recognition of the steps which have been and continue to be taken, to address the EU’s concerns.”
STEP Cayman Islands added that it “supports the work of the Cayman Islands Government and its resolve to continue to engage with the EU to ensure that Cayman is removed from the EU list of non-cooperative jurisdictions with all haste.”
Cayman International Insurance, formerly IMAC, also indicated support for the Cayman Islands Government in taking the necessary steps. “This technical listing does not impact or hinder Cayman Islands based international insurers and reinsurers from supporting our clients and meeting their insurance needs. Internationally recognised standards for regulation will continue to be met and we are confident that recent legislation passed by the Cayman Islands Government will be affirmed as meeting the required standards and will lead to our removal from the listing at the next possible opportunity.”
Cayman Islands Institute of Professional Accountants CEO Sheree Ebanks commented, “While it is disappointing that the Cayman Islands has been placed on the list of non-cooperative jurisdictions, the Cayman Islands Institute of Professional Accountants fully supports the Government’s efforts towards delisting. CIIPA is committed to continue to work with Government to overcome the technical issues that led to the EU’s decision, and with the excellent public sector-private industry collaboration will be removed from this list at the earliest possible opportunity.”