Cayman Islands

Corporate - Other issues

Last reviewed - 07 July 2020

Tax information reporting

The Cayman Islands currently has 36 signed Bilateral Agreements, of which 29 are in force. Please refer to the Tax Information Authority’s website (http://tia.gov.ky/pdf/International_Exchange_of_Information_Instruments.pdf) for the latest list of Bilateral Agreements.

The Cayman Islands agreed with the United Kingdom (UK) government to implement the Savings Directive, and so the Reporting of Savings Income Information (European Union or EU) Law (2007 Revision) came into force, setting out a reporting regime whereby Cayman paying agents making interest payments to individuals who are tax resident in an EU member state may have to report interest paid. The Cayman Tax Information Authority receives or facilitates submission of such information reporting.

The Cayman Islands will comply with the regulations set forth under the Common Reporting Standard (CRS). The country recognises that the regulations are a key component of the Cayman Islands’ implementation of automatic exchange of financial account information in accordance with the internationally agreed standard. The Cayman Islands Tax Information Authority updated guidance on CRS in Q1 of 2017, including updated Cayman Islands entity and individual self-certification forms and other information, which took effect as of 1 January 2016. The Cayman Islands took a similar approach to CRS as with the UK and United States (US) Foreign Account Tax Compliance Act (FATCA) (see below), including certain due diligence and reporting obligations.

Intergovernmental agreements (IGAs)

The Cayman Islands and the United States signed their Agreement to Improve International Tax Compliance and to Implement the Foreign Account Tax Compliance Act based on the Model 1 IGA in 2013. To accommodate the non-direct tax system of the Cayman Islands, the IGA is a model 1B (non-reciprocal) IGA. The Cayman Islands and the United Kingdom also signed their Agreement to Improve International Tax Compliance, which is based on the US Model 1 IGA in 2013. Under these Agreements, Cayman Islands financial institutions must provide the Cayman Islands competent authority with the required information. The Cayman Islands competent authority forwards that information to the competent authority in the relevant jurisdiction. Please refer to the Tax Information Authority’s website for access to the Agreements and related Guidance Notes (www.tia.gov.ky/pdf/FATCA_Legislation.pdf).

Country-by-country reporting (CbCR)

The Cayman Islands has entered into CbCR as part of the Base Erosion and Profit Shifting (BEPS) Action Plan set forth by the Organisation for Economic Co-operation and Development (OECD). With the goal of promoting transparency and accuracy in reporting, CbCR requires multinational enterprises to include detailed financial and tax information relating to the global allocation of their income and taxes, among other indicators of economic activity.

The Cayman Islands’ competent authority will annually exchange, on an automatic basis, the CbC report received from each reporting entity that is resident for tax purposes in the Cayman Islands with all such other competent authorities of jurisdictions with respect to which the Cayman Islands has an agreement in effect and in which, on the basis of the information in the CbC report, one or more constituent entities of the multinational group of the reporting entity are either resident for tax purposes or are subject to tax with respect to the business carried out through a Cayman Islands permanent establishment (PE).

CbCR is in effect for fiscal years beginning on or after 1 January 2016. The due date for reporting is 12 months after the fiscal year-end and notification is required no later than the last day of the reporting fiscal year. For reporting fiscal years ending before 1 January 2017, the reporting due date is 31 May 2018.