News & Insights

FATCA and Common Reporting Standard Update

FATCA Notifications and 2014 Returns should have already been completed and successfully submitted. 

FATCA

FATCA Notifications and 2014 Returns should have already been completed and successfully submitted. The Department for International Tax Cooperation (“DITC”) is in the final stages of preparing data to be provided to the IRS. The Cayman AEOI Portal has closed (from 5:00pm (Cayman Islands time) on 28th August 2015) to facilitate this preparation.

The DITC has taken a soft approach to the reporting of 2014 US FATCA data this year but has stated that it cannot guarantee that late submissions will be accepted after 5:00pm (Cayman Islands time) on 28th August 2015. The opportunity to remediate late reporting therefore ceased upon the AEOI Portal being closed.

Any requests relating to changes to Financial Institution name, GIIN or Principal Point of Contact information must be made by a person with authority to do so.  Please be advised that DITC staff will therefore only be able to assist users that are currently shown as the Principal Point of Contact or have provided the authority to such Principal Point of Contact in the previously submitted letter of authorisation. All queries must be sent to caymanaeoiportal@gov.ky

CRS

Further to our last update when we reported that the Cayman Islands Ministry of Finance had announced its plans to introduce regulations in October 2015 dealing with the implementation of the Common Reporting Standard (the “CRS”), the Cayman Islands Ministry of Financial Services has circulated, for industry feedback, draft regulations, The Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations, 2015 (the “Draft Regulations”). Industry feedback should have been submitted by 5pm (Cayman Time) on 21 September 2015. 

The Draft Regulations provide for the CRS to from part of the law of the Cayman Islands from 1 January 2016 and will require Reporting Financial Institutions to establish and maintain an arrangement designed to identify Reportable Accounts.  These arrangements must:

  • Identify each jurisdiction in which an account holder or controlling person is resident for tax purposes;
  • Apply certain due diligence procedures; and
  • Ensure that information obtained or a record of the steps taken to comply with the regulations is kept for 6 years from the end of the year to which the information relates or during which the steps were taken.

In addition, as with FATCA, each Reporting Financial Institution will need to notify the Cayman Islands Tax Information Authority that it has reporting obligations, by 30 April 2017 and make a return setting out certain required information on reportable accounts held by it during 2016 on or before 31 May 2017.

Once the Draft Regulations have been finalised, we will provide an update setting out the obligations on Cayman Islands Financial Institutions contained therein and any changes to the above information.