FATCA Updates - December 2013 Publication

 

Cayman Islands and U.S. Sign New Tax Information Exchange Agreement to Accommodate FATCA

 

The Cayman Islands and the United States recently signed an agreement that paves the way for automatic exchange of tax information under the United States Foreign Account Tax Compliance Act (“FATCA”). The two governments also signed a new tax information exchange agreement (“TIEA”) which stipulates the legal channels through which information will be automatically exchanged.

 

FATCA is a U.S. tax-reporting initiative, developed to assist the U.S. Internal Revenue Service in preventing tax evasion by U.S. persons living overseas. Cayman has signed a FATCA Model 1 intergovernmental agreement (“IGA”) which enables financial institutions in Cayman to directly report information to Cayman’s Government regarding accounts and non-financial entities that substantially are owned by U.S. citizens and residents. The Cayman Islands Government will then relay the information to the IRS. FATCA requires financial institutions to register with the U.S. Treasury and, in accordance with the IGA, agree to report certain information about their account holders. Treasury will open the registry portal this January.

 

The IGA and the TIEA can be found at the following links:

http://tia.gov.ky/pdf/USA-Cayman_FATCA_-_29_November_2013.pdf

http://tia.gov.ky/pdf/Agreement_-_USA_-_29_November_2013.pdf

 

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