Government signs more tax deals

(CNS): The Cayman Islands government has taken advantage of the Tax Information Authority Law passed late last year enabling it to sign request agreements with seven more European countries. The law allows Cayman to sign deals which do not require a bilateral treaty but enable requests to be made in relation to both civil/administrative as well as criminal tax matters.

The latest seven countries are Germany, Austria, Belgium, Czech Republic, Luxembourg, Slovak Republic and Switzerland. “The Cayman Islands was one of the first jurisdictions to commit to OECD standards for transparency and exchange of information in tax matters. We have upheld that commitment by working with OECD and non-OECD colleagues to design effective standards, by reflecting those standards in our domestic regime, and then embarking on a programme to extend assistance arrangements to other countries, the first being our tax information agreement with the US signed in 2001,” said Leader of Government Business, Kurt Tibbetts.

“Our actions today in extending tax information assistance to seven more countries is the culmination of many months of technical work, and we are especially grateful to Germany for the insight they were able to provide by virtue of having a unilateral mechanism for cooperation in tax matters themselves.”

The unilateral mechanism is complementary to Cayman’s bilateral negotiation programme. The latest development in that area was the conclusion of technical negotiations with the Nordic countries for a series of bilateral agreements, including tax information agreements. The seven tax information agreements are currently going throughthe political authorisation process on both sides, to enable execution at a signing ceremony in Stockholm on 1 April 2009, with the commercial agreements to follow in June 2009.

Tibbetts stated that the Cayman Islands is still looking forward in the immediate term to concluding bilateral arrangements with the United Kingdom.

With pressure mounting on offshore financials service centres as a result of the Stop Tax Haven Abuse Bill by Senator Carl Levin as well as the forth coming G20 meeting where a list of jurisdictions facing potential blacklisting will be discussed, one which currently includes Cayman – the need to demonstrate openness and transparency may be critical to the future success of Cayman’s Financial Services.

The IMF recently concluded an assessment of Cayman, details of which have yet to be revealed, and Michael Foot is currently here leading a delegation from the UK Treasury reviewing the industry as a result of instructions in the UK Chancellor Alistair Darling’s Budget review.