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An update on trends in the Cayman funds market, changes for 2021, and updates on CRS, FATCA, Economic Substance and Country-by-Country Reporting.
Trends in the Cayman Funds Market
The Cayman Islands is well placed to take advantage of the current shift towards securitising common assets and decentralised finance (De-Fi) products and Stuarts is working on a number of innovative funds offering products in the area.
2021 - Further Changes Ahead
2020 saw an unprecedented increase in regulation in the Cayman Islands and whilst we expect there to be continued focus on the areas of anti-money laundering and data protection, 2021 is expected to be quiet by comparison, we will be expecting the second phase of VASP regulation as well as exempted limited partnerships being brought into scope of the economic substance regime.
CRS, FATCA, Economic Substance and Country-by-Country Reporting
The Department for International Tax Cooperation of the Cayman Islands (the “DITC”) has issued an advisory that the new online portal is open for CRS, FATCA, Economic Substance and Country-by-Country reporting.
All users that had a user account in the previous portal will receive an email from email@example.com with steps to activate and access the new portal. In order to receive the emails, make sure that firstname.lastname@example.org isn’t blocked by spam filters.
CRS & FATCA
For CRS and FATCA notifications please visit the DITC Portal Registration and Login Page on the DITC website and click on “CRS & FATCA Registration”. The revised reporting deadlines are listed on the website (and the revised CRS deadline is listed below). A CRS Guidelines, DITC Portal user guide and information on differences between the AEOI Portal and the new DITC Portal is available on the website.
Reporting Deadlines - The deadline for the 2019 and 2020 CRS Compliance Forms is 15 September 2021.
Economic Substance (“ES”)
ES functionality is being added to the DITC Portal.
The deadline for submitting the ES Notification was on 31 January 2021. Entities not in compliance will accrue penalties.
ES Returns Deadlines
The deadlines for submitting ES Returns are as follows:
- All ES Returns (except IP Business) for the annual period of 31 December 2019 to 30 April 2020, the submission deadline is 30 April 2021. ES Returns for the annual period of 1 May 2020 and onwards, the submission deadline is 12 months after the period end date
- ES Returns for IP Business and Tax Residency Exemption for the annual period of 31 December 2019 to 29 February 2020, the submission deadline is 28 February 2021. ES Returns for IP Business and Tax Residency Exemption for the annual period of 1 March 2020 and onwards, the submission deadline is 12 months after the period end date
The applicable ES Return Forms for filing the annual ES Return are now available. The first filing deadline which was applicable to intellectual property business and the tax residency exemption was on 28 February 2021. The next filing deadline is 30 April 2021 and applicable to relevant entities conducting banking business, financing and leasing business, fund management business, headquarters business, holding company business, insurance business and shipping business. Entities not in compliance will incur penalties.
Responsible Persons (RPs) of entities that are required to report under ES, and who are already registered to use the DITC Portal, will automatically see the ES entities they are assigned to. Those RPs who are not already registered to use the DITC Portal will be sent links by e-mail to enable them to register and activate their account. The email will be sent from email@example.com. Please have your IT Team ensure that the email and the IP address (220.127.116.11) from which activation emails are being sent have not been blocked.
The DITC Portal User Guide will be updated.
Country-by-Country Reporting (“CbCR”)
Amendment of Guidance
The Amendment dated 16 December 2020 amends the Tax Information Authority’s CbCR Guidance v1.1 dated 4 May 2018 and also replaces its CbC XML Schema – User Guide dated 4 May 2018. The Amendment is available here.
Cayman Islands CbCR Portal
The Amendment provides the web address for the CbCR Portal, which can also be found in the CbCR section of the DITC website.
Update to key dates under CbCR in the Cayman Islands
As the CbCR Portal has been offline since 25 March 2020, it has not been possible for MNE Groups to submit notifications and reports to the DITC. The deadline for submitting notifications and reports for all entities defined below was 28 February 2021.
Key dates and obligations:
5 January 2021
Cayman Islands CbCR Portal is reopened to permit Reporting Entities to make a CbCR Notification in respect of their Constituent Entities and to permit Reporting Entities resident in the Islands to make a CbC Report.
28 February 2021
Deadline for Constituent Entities, where their Reporting Entities are resident in the Islands, to make the CbCR Notification for all Constituent Entities resident in the Islands for those MNE Groups with a Fiscal Year which ends on or before 28 February 2020.
Deadline for Reporting Entities resident in the Islands to make the CbC Report for their MNE Groups for any Fiscal Year that ended on or before 28 February 2020 (otherwise, the deadline for reporting in respect of any subsequent Fiscal Year is within 12 months of the end of that relevant Fiscal Year).
Questions relating to CbCR may be emailed to CaymanCbCRPortal@gov.ky.