The Cayman Islands has been added to the European Council’s revised conclusions of the EU list of non-cooperative jurisdictions for tax purposes.
According to the European Commission, the Cayman Islands does not have appropriate measures in place relating to economic substance in the area of collective investment vehicles.
In response to the European Commission’s decision, Cayman Finance CEO Jude Scott said: “The Cayman Islands has had a track record of meeting evolving global standards and that is expected to continue.”
Scott added: “As an organisation, we stand ready to work with the government, as it sees fit, as it cooperates with the EU to be removed from the list. We anticipate this decision will happen in the not too distant future.”
The Cayman Islands Government recently introduced modernised legislation that enhanced the oversight of investment funds. Scott explained that this was in response to an evolution in global regulations, primarily driven by the European Union and other global standard-setting bodies.
Scott said: “Just as approximately 30 other jurisdictions were removed after taking the necessary actions, we look forward to the same happening with regard to the Cayman Islands. In the meantime, clients can continue to expect the usual high professional standards from their Cayman service providers that they have always received.”
Within the last year, a review undertaken by the Organisation for Economic Cooperation and Development (OECD) of the Cayman Islands’ domestic legal framework that includes economic substance, found that the Cayman Islands tax neutral regime is not harmful and meets all economic substance requirements.
The EU also came to the same conclusion, with the exception of the EU’s requirement for investment funds, which the government recently introduced new legislation to address.
Cayman Finance said it is confident that the country’s government will take all necessary actions to address any remaining EU concerns in a timely manner to ensure removal from the list at the earliest possible opportunity.
Cayman International Insurance, formerly IMAC, also indicated support for the Cayman Islands Government in taking the necessary steps. It said: “This technical listing does not impact or hinder Cayman Islands-based international insurers and reinsurers from supporting our clients and meeting their insurance needs. Internationally recognised standards for regulation will continue to be met and we are confident that recent legislation passed by the Cayman Islands Government will be affirmed as meeting the required standards and will lead to our removal from the listing at the next possible opportunity.”