As the Cayman Islands Government’s Foreign Account Tax Compliance Act (FATCA) Task Force evaluates the suitability of a government-to-government reporting arrangement with the US, the local financial services industry is making its necessary preparations for managing FATCA.
“Government is aware of FATCA developments, including the recent publication of the US Treasury’s Model 1 Intergovernmental Agreement to Improve Tax Compliance and to Implement FATCA,” says Samuel Rose, representing the Task Force. “The Model 2 Intergovernmental Agreement, now in development with the US Treasury, Japan and Switzerland, also is expected to be released soon.”
Rose says the Cayman Islands Government will continue to monitor these and other possible FATCA developments, as the collective basis upon which it will make its decision on whether to enter into a government-to-government reporting arrangement with the US.
FATCA also contains language directed specifically toward foreign financial institutions (FFIs) that requires them to be prepared to meet FATCA’s proposed compliance obligations, regardless of whether a government has a reporting agreement in place.
“Government understands that the FFIs in the Cayman Islands are well on their way to ensuring that they are taking the necessary measures to comply with FATCA”, says Rose, who is the deputy chief officer in the Ministry of Finance (financial services).
The Cayman Islands Premier, the Hon McKeeva Bush, has also recognised industry for its proactivity in ensuring its readiness for FATCA.
“Government is keeping track of the discussions surrounding FATCA, and evaluating both information and dialogue in order to make the best choice for our jurisdiction regarding a reporting arrangement,” he says. “We will be in a position to decide on the best way forward once the Model 2 Intergovernmental Agreement is published and we have been able to fully evaluate all the options.
“As Government continues this process, it is encouraging that FFIs in the Cayman Islands are moving ahead with their particular preparations, in accordance with US requirements.”
Government’s FATCA Task Force comprises the Office of the Financial Secretary; the Attorney General’s Chambers; the Tax Information Authority; the Cayman Islands Monetary Authority; and the Ministry of Finance (financial aervices).