CIG signs up for disclosure
(CNS): The Cayman Islands government announced on Friday evening that it would commit to the Convention on Mutual Administrative Assistance in Tax Matters, further pushing out the boundaries of transparency in the offshore sector. After considerable pressure from the UK government in particular and in the face of growing international pressure for openness, transparency and automatic exchange of information between countries in connection with tax matters and beneficial ownership, Cayman is one of the first overseas territories to follow the crown dependencies in its decision to truly lift the lid on the offshore financial world.
A CIG delegation headed by Premier Alden McLaughlin will go to London on Tuesday at the invitation of David Cameron, the UK prime minister, who is hosting two events prior to the G8 meeting, which is being held inNorthern Ireland on 17 and 18 June. ‘Open for Growth’ a meeting being dubbed the three ‘T’s (tax, transparency and trade) will be held on the 15 June as well as another private meeting at Ten Downing Street.
The delegation will include Financial Services Minister Wayne Panton, Finance Minister Marco Archer and Financial Secretary Ken Jefferson.
During the UK visit the Cayman delegation will meet with Mark Simmonds, the FCO minister for the OTs, to address Cayman's budget issues. However, the focus of the trip will be on the Convention on Mutual Administrative Assistance in Tax Matters, which is an OECD-Council of Europe multilateral agreement. This was developed to combat tax evasion and aggressive tax avoidance by promoting cooperation among jurisdictions for the exchange of information among relevant authorities for tax and transparency purposes.
“Cayman has engaged in substantive discussions with HM Treasury on the particulars of the convention,” McLaughlin said. “We are satisfied that the extension of the convention to our Islands will be done in accordance with the UK’s recognition of Cayman’s fiscal autonomy, and the well-established principle that countries have the prerogative to set their own tax rates.”
He said that committing to the convention was in line with Cayman’s extensive network of bilateral exchange of information agreements, such as the US and UK FATCA, the European Union Savings Directive, and the G5 pilot on multilateral automatic information exchange.
“We agree with the UK’s statement that there is ‘no point in dealing with tax evasion in one country, if the problem is simply displaced to another',” McLaughlin said following government’s decision. “With this in mind, we also agree that there should be equitable adherence, including within the G8 countries, to global tax and transparency standards. This will set the foundation for full and effective participation, by all countries, in the true spirit of these efforts.”
McLaughlin said Cameron had acknowledged the UK’s interest in seeing the Overseas Territories and Crown Dependencies flourish. “This important recognition acknowledges the benefits that international financial centres, like Cayman, contribute to the global economy – including the stimulation of cross-border trade and investment, which grows economies and creates jobs,” added the premier.
Appearing as a guest on Radio Cayman’s Talk Today programme on Friday, McLaughlin said the Cayman government had engaged in lengthy discussion about the tax transparency issues and the technical details since being voted into office last month.
“We have been working through what Cayman’s position should be in relation to this matter and working with Cayman Finance to make sure we take into account what the financial services community think about what is being proposed,” he added.
There are high expectations around the world that the convention will open doors for governments to track down tax cheats and Cameron has been under considerable pressure himself to ensure that the UK’s territories are all signed up before Britain hosts the G8 summit, where the issue of tax avoidance will be high on the agenda.
“Our position has always been that we want as many jurisdictions as possible to join the multilateral convention, including the Overseas Territories,” the UK Treasury said this week.
Category: Politics
There is a classic schoolyard power exercise where on the count of three, everyone in the group pulls down their pants. There would only be one gullible kid that would actually do it, and they were very unlikely to be the trend-setter, and the victim almost certainly faced further ridicule. We don't want to be that kid.
Well this is who the ppl wanted on May 22nd so take what comes with it. This is exactly what the UK wanted individuals that wiould agree with everything they want to do, I feel sorry for these poor islands over the next four years!! God Help Us All!!!
As poor as the other set was at least they stood up and did not bend over for eveything the UK wanted!!
Isn't it surprising how so many companies are flocking to the UK now to setup because of their new lower corp taxes, but Cayman is getting destroyed by blindly giving away, whatever advantage we had in the offshore world, just a quick question what have we been given in return for giving away or livelyhood, nothing, way I see it or budget should be getting annual grants from all these countries signing agreements with us to transfer tax info, if we providing the in we should be getting a commission, the UK is refusing to allow us to build a few schools and a Port that will keep us afloat, but willing to pay dues to the tone on billions to the EU just to help fund a new headquaters, Alden better learn to say NO loud and clear quickly instead of been a yes man fotr the UK
Or better yet, say "yes absolutely, just as soon as you and everyone else does the same".
i am trying to stay positive but not so sure cig should be rushing to make these commitments
Is the answer – LOW TAX JURISDICTION?
The world seems to hate the Tax-Havens. Would it be wiser and less confrontational with the world if the Cayman Islands became a low tax jurisdiction? Then we can argue that we pay tax – albeit 5% for example.
Now we are NOT A TAX HAVEN we all pay tax we just don't pay the 30-50% that other countries pay? Simple!
Because nobody would trust you. 5% to start becomes 6% and then 7% and then 10% as the government becomes addicted to taking other people's money, and up it goes as spending spirals out of control (you know what that looks like, right?), then the people get pissed and move their money out of the reach of those trying to take it, and out it goes to an off-shore jurisdiction that isn't Cayman. In short, governments can't be trusted with access to our money – they just can't be trusted.
Right. Look at the abuse Google is geting for being based in Ireland, a (comparatively) low tax jurisdiction. Ironically the UK is gettng the same treatment from France. Anywhere that pays less than the high tax rates will encourage capital flight, and will always be a "tax haven" to the high tax, high spend countries. They dont want us to charge tax – they want to charge the tax. Telling the Americans that Google pays the same tax in Ireland asit would inthe UK would not help. Your post also misses the problems with compliance costs and withholdling tax that arise the moment you have any tax at all – even 1%.
This is no haven. Our society is already subject to consumption-based tax system in the form of import duties and governement fees. Even if it's a different tax structure than the western world is used to (there are no direct income taxes, or inheritance taxes), we are not a haven from government bureaucracy. Heck, the CIG employs 25% of this tiny nation – show me a bigger per capita government anywhere else in the world! We need to do a better and more courageous job at educating and dispelling the tax haven moniker just telling the facts as they are!
Winston on your last night campaigning you said a pay cut was needed DELIVER NOW!
Was this also a PPM position and does he have the votes to DELIVER NOW?
I am wondering if all of you calling for a pay cut would like to donate a month’s salary to help out the country. Please put your money where your mouth is!!
Perhaps you missed the news flash.
Winston is a councilor for Education.
I am sure he and Tara will do a tremendous job with Education.
Winston said a lot of things he won't deliver on – all election lies to trick the voting populace.
Typical UK ruling of colonies…dont give them time to think!….Alden, you should have pulled out your "I'm busy at the moment putting government together" card when they called.
They hit you while off guard…dont you see that??
Well at least now we can feel comfortable that we have a delegation representing the Island who can conduct themselves in a professional manner and actually do understand what the topic of discussion is!
Yeah – Cameron should have the G8 meeting rescheduled cause Alden's a little busyt right now.
This will be great news for all of the criminals in the Kidnap and Ransom and Extortion business. Way to go OECD. How about applying the same level of transparency to those member nations that still allow bearer share companies? I don't know why anyone would incorporate in the Cayman Islands when the exposure for doing so might exceed every state, province, and nation in the western world. Please explain how that is good for business (and necessary annual government revenue)?
How many Caymanians bragging about dual citizenship with USA file taxes?
Cameron looking to generate some positive PR with yet another UK headline … all the while London is our strongest competitior in the industry.
His rich friends and greedy and corrupt colleagues would lynch him if real change was to ever be implemented.
Furthermore, that would negatively impact his fast approaching future subsequent to PM'ship. Blair got a seat on the board of an oil company based in the country that he illegally invaded and carried out war crimes – what about ol' Cam-Cam? Poor Samantha may have to go back to her "modelling" to support the family, lol!
I only hope the British public sees this for the con that it is.
Whodatis, his favourite drink is bitter.
London is NOT our strongest competitor in the market. Totally different markets, and London actually provides an enormous amount of our business. Please stick to what you know (whatever that is).
Sounds like someone needs to upgrade their understanding on the changes taking place in the market.
Oh well, so long as you got in your little jab on Whodatis all is okay.
Congrats to you and yours.
We need to ask the UK to do a business case for this so that we can see what impact it will have on our economy.
Although I accept that we dont have much choice in this matter if we are going to do something that might damage our economy then we need reimbursement from the UK and OECD to get us through the impending financial loss.
Just agree to accept but ask for financial assistance. Their governments will certainly benefit so why should we not seek to benefit too?
The uk & usa better try n deal with their country economy rather than policing the world!
You giuys are much easier to squeeze.
Precisely!!! Silly Caymanians. I have never seen folks go so willingly go to the gallows like how we are allowing the UK is dismantling our economy.
You have no choice Bobo.
A very sensible decision
How many people here think that Cayman had any choice in the matter?
Before people comment on this article, please do your homework. Here’s a helping hand. http://www.oecd.org/ctp/exchange-of-tax-information/Explanatory_Report_ENG_%2015_04_2010.pdf
CIG doesn't have to worry about Rollover. People will leave in droves.
And go where??? This has been endorsed just about worldwide in first world economies, as the G7/G8, the G20 and the United Nations have already endorsed and with no doubt will be implemented in the near future.
It may be endorsed by everyone, but most of the OECD member states fail to offer similar level of transparency. We should agree to all of it, subject to the rest of the world actually adopting it themselves. Panama and Belize and many of the OECD members still offer bearer shares for crying out loud. To blindly agree without some strategic path for phase-in, is economic suicide.
Haven't been looking around much these last 5 years or so, have you? The droves have already driven (flown and paddled) and taken their money with them. I would have expected most people to have noticed the collapsed economy, but hey, maybe the fishing has been really good this last little while…
The UK got the right government to deal with now – no body to stand up and fight for us. The finacial sector is suffering now from a lack of withering portfolios – it can only endure so much.
We are making quite a lot of money migrating funds and trusts and closing down companies.
You think that Mackeeva standing behind a Micropohone at a public meeting and shaking his fist at the UK is considered "Standing up" ? How many of these agreements did he turn down? How many of these meetings did he attend and tell the FCO to get Stuffed? yiou see the difference between Alden and Mackeeva is really not hard to figure out! One of them is sensible and practical and methodical – Alden and One is simply full of Hot AIR! – Mac
We have now traded a loud mouthed buffoon for a real leader and I wish people would stop trying to compare the two.
Please do not forget that the Cayman Islands are a dependent territory of the UK. We simply have no choice. Now we have intelligent persons to speak for us instead of the “Village Bully” and that is refreshing!!
Beneficial ownership? Really? Does that mean that all the fronting relationships, true ownership of Cayman Law firms, and even the ownership of companies awarded Government Contracts or lucrative development contracts will become available? Oh goody, I cannot wait!
For those who got money to hide/make hard to trace – they will be very creative and pursue other options. Not all of the world "voluntarily" participates in the bullying being done by G8/G20. Cayman, as lackeys to the UK, will submit to the pressure . . . at the long term costs to our islands. Ever since the initial "white paper" from the Motherland some few, short years ago we can clearly see that the UK is intent on either forcing our hands into independence or coercing us to bow to their every wish. SAD, SAD, SAD.
Law firms? They are owned and controlled by Cayman Islands attorneys. If do not believe me, read the Law!
You funny person!
So why is it we never get any credit, including from the UK, when we agree to go along with these various "initiatives"?
Because it isnt what we say that matters, its what we do!
Generally, that means nothing, the mindset is and always has been to help ourselves to easy money and not mind too much what the morality of it demands. Take mutual funds. The worlds centre for registering funds, and we are happy to take loads of their fees annualy. Do we undertake the regulatory duties those fees are paid for? No, that would require we work for the fees and actually monitor the funds activities. No we just take the fee! So now the world is fed up with letting us take easy money to ignore our resposibilities and we shouldnt be surprised!
Thank you for making a very powerful and true statement.
Because the real objective is to close us down. Anything that fails to do that has not gone far enough in their eyes.
Why?? Because they are Too busy laughing at us so much to have signed up to things they haven’t signed yet…that’s why!!
The ultimate end game is that Cayman's incorporations drop precipiously, disrupting annual CIG revenue, eventually compelling Cayman to introduce direct taxation, and the wasteful western governments that propelled Cayman there can then "demonstrate" to their constituents that no system of governance works without direct taxation.