Cayman Finance has broadly welcomed the draft International Tax-Co-operation (Economic Substance) Bill, 2018, released by the Cayman Islands Government.
The draft Bill is scheduled for debate in the Legislative Assembly later this year and is expected to take effect by 1 January 2019.
It is the latest in a series of steps by the Cayman Islands to meet its 2017 commitment as an Inclusive Framework member under the OECD’s global Base Erosion and Profit Shifting (BEPS) initiative, and in particular BEPS Action 5. It also reflects Cayman’s commitment to meet new European Union requirements modelled on BEPS Action 5.
In a statement, Cayman Finance said pleased that the Cayman Islands Government is moving to adopt the new global standard that will also be applied across the other 123 BEPS Inclusive Framework member jurisdictions.
“We have always demonstrated the commitment to be a transparent and compliant jurisdiction, responding positively to internationally agreed standards,” the body said.
“Those who establish Cayman structures do not do so to engage in base erosion and profit shifting activity; they do so because Cayman is an efficient neutral hub with key expertise in handling complex transactions.
“Cayman and its service providers are used to constantly evolving to meet global requirements and we are confident that this latest development will be no different. We anticipate that our sophisticated clients will adapt as required and take this in their stride. It is worth noting that all of Cayman’s main competitor jurisdictions are in a similar position as BEPS Inclusive Framework members.
“We understand from the Cayman Islands Government that they will, in the near future, be issuing for consultation related guidance notes which will provide additional insight into how the draft legislation is intended to operate in practice.
“We encourage our members to familiarise themselves with the Bill and, once the final form is passed into law, we recommend that our members seek Cayman Islands legal advice on what it means for them and their clients.”
Cayman Finance, Cayman Island Government, International Tax-Co-operation Bill,