From IFC Review

While Financial Services Minister Hon Wayne Panton has taken note of statements made by US Democratic presidential candidate hopeful Hilary Clinton on targeting Cayman Islands and other offshore centres he says he is not too bothered at this time, reports the Cayman Reporter.

“It sounds like Mrs Clinton’s (tax) proposal would be of domestic application and I don’t see it as necessarily negative commentary for us,” Minister Panton said as he spoke with The Cayman Reporter on Mrs Clinton’s comments on US television.

He said the presidential frontrunner proposals will be applicable for internal mechanisms within the US and not direct interactions with Cayman.

However he hastened to add that should she decide to take aim at Cayman he stands ready to respond appropriately.

“The comments from Mrs Clinton seem to relate to proposals of domestic application. We cannot legitimately complain about those sort of proposals. It may indirectly impact us, but there is no real legitimacy in our complaints in that case. Where there is an attempt to go after us as jurisdiction that is quite another thing,” Minister Panton said.

Mrs Clinton, speaking in an interview with MSNBC on Monday (11 January,) took issue with offshore centres as she addressed tax issues and her plans to deal with it.

She reportedly said, “We are now in a position, I think, where we can go after some of these schemes that you did read about: the kind of misclassifying of income, trying to make it look like it’s capital gains when it is really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”

Mrs Clinton, in the interview, said she wanted to implement a four per cent tax surcharge on Americans making more than US$5 million annually so as to ensure the rich pay a higher effective tax rate than middle class families.

Minister Panton said that it was not for Cayman to comment adversely about the US “laws, rules or regulations‎ of domestic application or proposals” unless there is an element that purports to be extra-territorial and impacts this country directly.

“We certainly remain significant and relevant in the international business arena and we will continue to promote the significance of our important role in global economic activity and growth opportunities,” he added.

Cayman is currently subject to tax information exchange agreements with the US and come 2017 tax information on all foreign nationals holding bank accounts or other financial holdings in Cayman will be automatically shared with tax authorities in their home countries when the Mutual Administrative Assistance in Tax Matters convention kicks in.

The automatic exchange has already started under the US FATCA for American nationals. Next year the first phase of automatic tax information sharing process will begin with the 37 early adopter countries.

Cayman is included in that initial group of countries. It will then be followed with the automatic sharing of tax information with some 96 signatory countries under the Mutual Administrative Assistance in Tax Matters convention.

This essentially means any foreign national who is subject to tax in their home country that is a party to the convention will automatically receive tax information related to that individual.

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