Since early 2011, the Ministry of Finance has been assisting Cayman residents who are US citizens or Green Card holders with understanding their obligations under the US income tax system.
The overall US tax compliance structure includes the recent Foreign Account Tax Compliance Act. The significance of this legislation is that US passport and Green Card holders who live outside of the United States – including Caymanians – may be required to retroactively pay US taxes, if they have not already fulfilled their US tax obligations.
As such the Ministry, in partnership with Cayman Finance, is facilitating a series of seminars which provide important information to the public. By launching a targeted communications programme that comprises expert speakers and a tax compliance coordinator, the goal is to build awareness of US tax compliance among Cayman’s affected public.
The initial seminar in April 2011 delivered important information to Caymanians with US passports, US citizens, Green Card holders, long-term non-residents of the US and financial institutions on the new provisions and directives of FATCA, which becomes effective 1 January, 2013.
Following further developments in the US tax compliance directives, the next session in this series of information seminars is scheduled for 31 January, 2012, when the Ministry, Cayman Finance and the Cayman Islands Society of Professional Accounts will host Getting Started: US Tax Compliance.
This seminar will focus on the Offshore Voluntary Disclosure Initiative, which enables noncompliant taxpayers to resolve their tax liabilities and minimise the chance of criminal prosecution. The seminar will also inform participants about how to fulfil the filing requirements of the Report of Foreign Banks and Financial Accounts (FBAR).
The third session is scheduled for 1 February 2012 and focuses on US immigration/expatriation options and related tax matters. This seminar aims to provide an overview of the US immigration law, US income, estate and gift taxes, and US expatriation tax rules and options regarding US citizenship.
In addition to tax compliance, during the next quarter government will continue to focus on international cooperation in order to solidify Cayman’s partnership with foreign governments.
Negotiations with foreign jurisdictions for tax information exchange agreements are ongoing, and government expects to increase the number of signed agreements from the 27 that are currently in place.
Several notable legislative amendments are also scheduled to take effect in early 2012. These include the Mutual Funds Amendment Law (2011), which was recently passed in the Legislative Assembly and makes provisions for the registration of master funds, and the new regulations for the Insurance Law (2010), which will pave the way for new opportunities for our jurisdiction as a centre for reinsurance. Immigration incentives also have been proposed.
On the business development side, the Special Economic Zones Law (2011) was recently passed, allowing for further development of Cayman Enterprise City, which is a special economic zone intended to attract global science, technology, commodities and derivatives, media, and educational entities to the Cayman Islands.