Following the signing of its 12th Tax Information Exchange Agreement (TIEA) with New Zealand on Thursday, 13 August, the Cayman Islands was promoted to the “white list” by the Organisation for Economic Cooperation and Development (OECD).
Cayman is now added to the Paris-based OECD’s “white list” of jurisdictions that substantially implement international tax standards after being on the “grey list” for a number of months.
“For over four decades the Cayman Islands has steadily earned its place as a world-class international financial services centre,” said Leader of Government Business/Premier Designate, Hon McKeeva Bush.
“The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information.”
Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing, which puts the Cayman Islands “alongside other countries that have substantially implemented the internationally agreed tax standard”.
“The Cayman Islands Government is looking forward to working in partnership with competent authorities in implementing agreements it has signed, concluding additional agreements with Cayman’s important trading partners in financial services and continuing its active role in the OECD Global Forum, to which it committed in 2000,” Mr Bush said.
Chairman of the Cayman Islands Financial Services Association (CIFSA) Anthony Travers said the organisation welcomed the OECD’s latest decision.
“We are pleased to see that Cayman’s position on tax transparency has now been recognized by the OECD. It is clear that the results achieved by CIG in completing the TIEAs and the ongoing initiative remove any basis on which legitimate criticism can now be levelled at the Cayman Islands on the subject of tax transparency. That should also exclude any further inappropriate reference to and mischaracterization of the Cayman Islands as a ‘tax haven’.”
“Historically on each occasion on which Cayman has improved tax and all crimes transparency we have experienced increased transactional flow and we have no reason now to doubt a similar positive outcome .We are pleased that CIFSA’s lobbying efforts on this subject caused sufficient resources to be brought to bear by the new administration which have achieved the right result.”
Mr Travers added: “We also believe that this issue will shortly be regarded as an historical footnote. There are now rather more significant issues on which the financial industry is focused.”
The Leader of Government Business said that this move to advance the country’s various global commitments in the area of international cooperation and regulation is part of the recently-elected United Democratic Party’s manifesto pledge to enhance and protect the industry.
Mr Bush on Thursday signed Cayman’s 12th tax information exchange agreement (TIEA) with New Zealand at that country’s embassy in Washington DC, United States.
“The Government has met an important objective of entering into several bilateral tax arrangements to support our commitment to upholding international standards in the exchange of tax information,” he said.
“We would like to express our thanks to the technical teams from both Cayman and New Zealand for their diligence in ensuring a swift and productive negotiating process.”
Signing on behalf of New Zealand was its US Ambassador Roy Ferguson. The Cayman Islands delegation included George McCarthy, Chairman of the Cayman Islands Monetary Authority; Richard Parchment, Senior Political Assistant; and Michelle Bahadur, Senior Assistant Secretary in the Office of the Financial Secretary.
“Today’s signing is also significant in helping to ensure the Cayman Islands remains a favourable, world class, transparent financial services centre; a position which we are committed to maintaining in the long term,” added Mr Bush. Cayman tax arrangements
The Cayman Islands’ competent authority for tax cooperation arrangements is the Tax Information Authority, established in 2005 under the Tax Information Authority Law (2005), introduced to provide for effective international cooperation in tax matters.
The Cayman Islands maintains 12 bilateral tax information arrangements with the following countries: Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Sweden, United Kingdom, United States.
In addition to arrangements under the OECD initiative, the Cayman Islands has bilateral tax treaties with the 27 EU member states under which it reports savings income information, pursuant to measures equivalent to the European Union Savings Directive.
The Cayman Islands’ unilateral arrangement for tax information assistance currently covers 12 countries, namely Austria, Belgium, Czech Republic, Germany, Ireland, Japan, Luxembourg, the Netherlands, Slovak Republic, South Africa, the United Kingdom and Switzerland.
The Cayman Islands has been an active participant in the OECD Global Forum on Taxation. In May 2000, the Cayman Islands was one of the first non-OECD jurisdictions to adopt the principles of transparency and exchange of information in tax matters, based on a level playing field. As an early adopter, the Cayman Islands has been involved in the development of the OECD’s standards for effective exchange of information in tax matters and is a member of the Global Forum’s level playing field sub-group, along with other OECD and non-OECD colleagues.