Cayman Islands: Revised CRS regulations, “second tranche”

Cayman Islands: Revised CRS regulations

The Cayman Islands Cabinet on 22 December 2016 issued an industry update noting the approval of an order and regulations concerning the common reporting standard (CRS). The regulations (the “second tranche”) were issued to provide for the “effective implementation” of the CRS.

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The Cayman Islands Tax Information Authority confirmed that after 2017, all CRS participating jurisdictions “will be subject to an in-depth peer review process facilitated by the OECD” and that:

  • A revised set of CRS guidance notes are to be issued in the first quarter of 2017 to provide clarity and assist with the practical implementation of the second tranche.
  • The Cayman Islands AEOI Portal User Guide will be updated in the first quarter of 2017.
  • Cayman Islands tax administration has not confirmed the list of reportable jurisdictions (there are ongoing assessments of participating jurisdictions being made by the OECD).
  • The issue regarding collecting self-certifications from U.S. trusts that are professionally managed was recognized as a challenge (the OECD is also aware of this). The Cayman Islands tax administration stated it will provide clarity in the coming months regarding this issue and whether a possible amendment to the requirements will be possible for these entities.
  • The regulations implement penalties and enforcement power for breaches and non-compliance with the CRS.  

KPMG observation

Entities domiciled in the Cayman Islands (including investment managers, general partner, or fund vehicles) need to review their CRS entity classification, as there are differences between CRS and U.S. FATCA that may have significant implications with respect to the entity’s obligations.

 

Read a December 2016 report [PDF 135 KB] prepared by the KPMG member firm in the Cayman Islands

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