Cayman’s tax exchange portal ready to run
(CNS Business): After months of preparation, the exchange of tax information from the Cayman Islands to other jurisdictions will become more efficient with the launch of a new online system. The Automatic Exchange of Information (AEOI) Portal will be launched this month and will be used by Cayman’s financial institutions to comply with their reporting obligations under intergovernmental agreements, including the US Foreign Account Tax Compliance Act (FATCA).
At a press conference Friday morning officials explained that in 2013 the Cayman Islands Government signed an Intergovernmental Agreement (IGA) with the US to coordinate the automatic exchange of information for tax purposes.
Under the IGA the Cayman Tax Information Authority (TIA) will gather information required by FATCA from financial institutions and make that information available to the IRS.
“This is a global initiative; it is not one that simply Cayman is adopting. Cayman, as a global player, needs to meet global standards and comply with global obligations. That’s why it is very important to us,” Financial Services Minister Wayne Panton explained. “To be at the point we are today, we can safely say we are ready and able to participate.”
Panton said reporting this type of financial information is nothing new for the island. He explained Cayman has been doing so since 2005.
“For the future of the automatic exchange of information, this is the new global standard by which all jurisdictions will ultimately be assessed to find out if they are complying correctly,” Panton stated.
Duncan Nicol, Director of the Department of International Tax Cooperation, explained that Friday’s announcement was the final component of a four-component process that involved enacting legislation, making regulations, issuing guidance notes for all of the FIs, and providing the portal for reporting and transmission purposes.
Nicol stressed that the information submitted into the online portal would be safe and that there were extensive security measures in place to make sure the data was secure.
“The requirements under FATCA are quite explicit in terms of security. In fact, the OECD has articulated some very detailed rules that countries have to comply with before they can switch on the automatic exchange of information with other countries. The standards are set internationally as to what we have to do,” he explained.
Financial groups can access the portal by a direct link on the government website and submit their reports. Minister Panton said the online forms are set to be a one-stop shop for all financial institutions.
“The significance to Cayman is evident by the fact that we have the highest number of financial institutions registered with the IRS under US FATCA, around 28 thousand plus. That clearly indicates to us that Cayman has a very significant role, is a very significant player in the global financial markets, and we have to take our obligations very seriously. And that’s why we are here today,” he stated at the news conference.
Last November the TIA awarded the contracts to establish and implement systems to operate its new AEOI Portal. Officials said the portal took six months to build and open for the financial services industry. Panton added that the price tag on was about $1.5 million but noted that, as of now, they are under budget.
Ministry Councillor Roy McTaggart said he believed that such initiatives could never have been as successful as they were without the cooperation between government and the private sector.
“I know everyone is ready and … they are keen to start reporting in order to fulfill their compliance requirements. I’m looking forward to next week when we can finally turn on this portal and the financial institutions can start to register as they have done with the IRS,” he said.
