Bush vows 12 tax deals
(CNS): Speaking to the French media, Leader of Government Business McKeeva Bush has said that by September Cayman will have 12 tax exchange agreements in place and should be removed from the post G20 OECD grey list. He told the French daily newspaper, Le Figaro, that Cayman would become "the Singapore of the Caribbean" and the jurisdiction was not afraid of regulation and transparency as it already has stricter controls than Paris and London.
Bush, who is currently travelling in Europe with a government delegation aiming to sign tax deals and visit the OECD headquarters in Paris, said that he had negotiated a double taxation agreement with France which would meet the requirement set by the OECD, but he did not say when that deal would be signed. The French deal has proved to be one of the most elusive of the tax agreements Cayman has been seeking to sign over the last few years.
Bush stated that he would be signing a bilateral treaty in Berlin on Tuesday, 23 June, with Ireland, which would bring the number of Tax Information Exchange Agreements to ten, just two short of the all important OECD dozen. Ireland is already one of the countries with which Cayman signed a deal under the unilateral mechanism introduced last year. However, the OECD does not appear to have accepted any of the agreements signed under that mechanism as meeting the required standard of exchange.
In his interview with Le Figaro Bush said that the goal now was to sign agreements with all OECD countries and said Cayman was sending a clear message to the international community that tax evaders would not be safe in the Cayman Islands. Bush denied that the mission to sign agreements had anything to do with fear and said Cayman was one of the first jurisdictions to cooperate with the OECD when it signed a tax exchange agreement with the United States in 2001.
Bush explained that the goal now was to remove the label of "tax haven" and said that by cooperating with the OECD he hoped Cayman’s voice would be heard on the international scene on an equal footing. He noted how many other more powerful countries with identical tax practices had not been not stigmatized in the way the Cayman Islands had. He said that Cayman even regulated its fund industry and that the jurisdiction would respect the new rules adopted by the G20. “Our goal is to reassure investors by becoming the Singapore of the Caribbean,” he said.
The leader of government business told the French daily that Cayman had nothing to fear from being transparent and even if those who were evading taxes left the jurisdiction they do not represent the bulk of investors in the Cayman Islands. He explained that investors in Cayman tended to be multinationals, mostly from the USA and also Europe, which benefited from Cayman’s zero -tax system and financial expertise. Bush noted that if the jurisdiction had been dependent on tax evasion and banking secrecy it would have collapsed when the agreement to exchange information with the United States was signed in 2001.
Category: Business
Probably these treaties will be bad for Cayman’s future growth when compared to the past market. But we are not in the past. Everything has changed.
The Government has no choice but to sign these treaties. We have no leverage and are over the proverbial barrel. The Government and CIMA have to look to other jurisdictions and be active and proactive in working with business to keep the Cayman offshore product back towards the top of the pile (I sense it has slipped over the last few years).
This should mean, at this critical juncture, that we try to bring business to Cayman regardless of the nationality of the worker living here doing that business – the economy is not a zero-sum game – many posters on this site seem to think that it is. This will utlimately be the move that will do the most to ensure the most Caymanian jobs for the present and the future.
Notsoanonamous I am afraid that it is you who seems to have completely missed the point(s), or at least the point you responded with does not address the original points raised by the writer who preceded you.
First, double tax agreements serve multiple purposes only one of which is the one you mention. They also serve to define which country has the right to tax which people and companies and under what conditions. That is why financial centres such as Dubai which are our competitors, (part of the UAE in case you do no know that), and which like Cayman do not have domestic taxation of income or capital make sure that they enter into double tax agreements rather than TIEAs. That way commercial entities using Dubai know what the rules are going to be going forward.
Second, and this may come as a shock, it may be that at some point Cayman may want to diversify its economy. At that point people might want to look at things other than the international financial flows which you refer to. In that regard, one clear example which is included I see in the recent double taxation agreement which Cayman signed with the UK relates to our shipping and aircraft registries which now have real growth opportunities, providing new employment opportunities for Caymanians.
Many organisations publish lists of which countries enter into double tax agreements and which enter into tax information agreements that have no benefits. There are also books which explain the reasoning applied and you will no doubt discover that tax information agreements are mostly used for narco-states and others that the onshore countries want to ensure go out of business.
I lived and worked in Dubai for 4 years – thanks very much for telling me that its part of the UAE, since I didnt figure that out in the time I was there. Cayman’s economy is not comparable to Dubai, which has a much bigger domestic economy. The vast majority of Cayman’s fanancial services business relates in one way or another to the activities of exempted companies, which already benefit from the undertaking re exemption from taxation in Cayman. The comercial entities that "use" Dubai are different to those that use Cayman, in so far as the nature of the institutional business is different. Cayman is simply responding to international requirements/expectations in signing the TIEAs and at the end of the day Cayman is likely to sign any agreement (whether DTA, TIEA or otherwise) which the Govt perceives creates the impression of international cooperation on the part of Cayman. Cayman is not setting the rules in relation to the TIEAs, it is merely playing the game. Your suggestion that Cayman should be signing DTAs rather that TIEAs seems to suggest that Cayman has some discretion in this exercise, and frankly it does not. DTAs do have other purposes as you note, but the main reason that countries enter into them is the one that I mentioned previously. Your point about diversifying the economy is a good one, although I’m not sure that the potential of the aircraft and ship registries would really amount to substantive diversification given the type of growth we would need to see in those areas before they bacome a significant component of our financial services product.
he is just completing what Mr. Alden started don’t be too impressed..
Why didnt Alden finish what he so called started??
"Why didnt Alden finish what he so called started??"
Duh! May 20th happened.
Anonymous, you have no idea what you are writing about. Cayman does not impose taxes on income, assets or payment flows on international financing transactions so there is no risk of double taxation and no Cayman tax liability to mitigate. Accordingly, there is no need, benefit or point of Cayman signing any Double Tax Treaties.
Singapore’s advisors understand international tax matters. MAC’s advisors don’t and as a result all of MAC’s efforts are going in the wrong direction on this international tax stuff. That seems to be a fair conclusion to be drawn from MAC’s statement that he wants Cayman to develop into a major financial centre along the lines of Singapore when he is chasing around Europe trying to make the OECD happy by signing TIEAs.
We Caymanians are really idiots, you know. We’re pissing around on these blogs about UDP and PPM and Mac etc. If we don’t sign these damn things , we’re dead. Stop listening to these so called experts in the financial industry saying we should "hold tight" ‘be firm" etc-they just need to keep up the tradition of retiring here at 40 after making their millions. Whoever it is, UDP or PPM we need to sign the things to get ourselves on the white list. They wont tell you, but Maples and Walkers and presumably others are seeing negative effects of the grey list. Hello-just because we have an airline-no further comment-doesn’t mean we have any real clout in the world!!!!!!!!!
Try so remember….’leadership’ does not always mean it’s good leadership. If you believe we should just sit back and ‘acknowledge leadership’ you obviously clueless! Perhaps you should try acknowledging that McKeeva is not the right kind of leader for this Country….he might just lead you off a cliff if you so blinded by his so called leadership skills!
To Anon
I sware, you people are so party blinded that you don’t even care if Cayman has a future or not. At least have the intestinal fortitude to acknowledge leadership when you see it.
"I sware, you people are so party blinded that you don’t even care if Cayman has a future or not. At least have the intestinal fortitude to acknowledge leadership when you see it".
I think you should take your own advice. So much adulation for the UDP leadership that you cannot acknowledge the facts. Very dangerous.
Lets not forget the role CIFSA have also had in bringing matters to this stage
Singapore negotiates tax treaties with meaningful benefits not TIEAs. That is a significant part of why business is moving there. Business understands that states that negotiate TIEAs with no benefits simply don’t understand business.
Clearly whoever is advising Mr. Bush better figure that out because at the moment they seem to be aiming in completely the wrong direction. Negotiating TIEAs at any cost will only make it certain that Cayman will never achieve either the status or the economy that Singapore has.
Further, the OECD clearly sees that persuading countries to negotiate TIEAs with no benefits is the fastest way to make sure that they ruin their economies and end up with income taxes at rates now seen in Europe.
Glad that we are getting there on the TIEAs and lets hope that the goal posts are not shifted before we do.
However, Mr. Bush should as Mr. Travers has done (well almost), be perfectly honest on these TIEAS that are being signed now.
They were not negotiated by Mr. Bush. They are merely being signed by him.
The current crop of TIEAs being signed were negotiated by the previous administration.
No doubt there will be other TIEAs negotiated by the UDP Government in the coming months and I will be happy to see them take credit for that but lets drop the propaganda for the moment and try to be honest for once.
This government will have to do that if it has any chance of achieving the credibility it needs and desires.
I agree. It is fantastic to see.
You better be sure that you fully understand what he has committed us to (I’m quite sure he doesn’t) before you start running your mouth. The fact of the matter is that Cayman is the OECD’s target and every time we get close to the goal post the OECD will shift it……we will never make the white list or if we do it will be a very temporary stay. So the big question is : how much should we give away, especially if we’re getting nothing in return ?
This is amazing,Mckeeva is doing in a few weeks what the PPM couldn’t do in four years.
As a former PPM member, I am totally impressed and glad I made the move. This is the kind of proactive government I was expecting from the PPM. I became so disillusioned and disappointed when I came to the realization they were more into building monuments to themselves than doing what was right for my country.
We need to put country first! Congrats to the UDP and to Mckeeva in particular for moving so fast to ensure the integrity and financial stability of our country.
"This is amazing,Mckeeva is doing in a few weeks what the PPM couldn’t do in four years.
As a former PPM member, I am totally impressed and glad I made the move. This is the kind of proactive government I was expecting from the PPM. I became so disillusioned and disappointed when I came to the realization they were more into building monuments to themselves than doing what was right for my country".
Don’t be fooled. Mr. Bush is simply signing up agreements that the PPM were negotiating and completing a process already well on the way. This has nothing to do with proactivity but instead with reactivity. Mr. Bush’s UDP was in govt. between 2001 and 2005 and did not negotiate even one TIEA although Cayman had committed to do so in 2000. Mr. Tibbetts govt. negotiated the important TIEA in 2001 with the U.S.