Cayman Islands extends 2016 deadlines for FATCA reporting and notification
From Simmons & Simmons elixica
The Cayman Islands is extending the Foreign Account Tax Compliance Act (FATCA) reporting and notification deadlines for 2016.
Submitted 13 April 2016
Applicable Law UK, USA, Cayman Islands
Topic Tax
Asset Management
Investment Bank Regulatory
Sector Focus Asset Management and Investment Funds
Financial Institutions
Contact: Hatice Ismail, Martin Shah
The Cayman Tax Information Authority (Cayman TIA) has announced that it will extend the FATCA and UK FATCA reporting deadline for 2016 to 08 July 2016 (from 31 May 2016).
Cayman financial institutions (including Cayman funds) should have notified the Cayman TIA that they are “reporting financial institutions” for both FATCA and UK FATCA purposes when they completed the Cayman AEOI Portal registration and notification process in 2015, unless they benefit from non-reporting status. For those Cayman financial institutions that failed to check the relevant box on the notification form relating to being a reporting financial institution for UK FATCA purposes, such status would need to be notified to the Cayman TIA in 2016. The deadline for such UK FATCA notification is being extended from 30 April 2016 to 10 June 2016.
The Cayman TIA is not expected to impose enforcement measures or other sanctions provided Cayman funds and other Cayman financial institutions comply with these extended notification and reporting deadlines.
The above extensions apply only to the 2016 notification and reporting obligations only – the deadlines for subsequent years have not changed.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
SOURCE: http://www.elexica.com/en/legal-topics/tax/13-cayman-islands-extends-2016-deadlines-for-fatca
Related:
FATCA and CRS
From Simmons & Simmons elixica
The FATCA rules are wide ranging and complex and will have a significant impact on non US financial institutions and others.
This microsite examines the key implications for the banking, capital markets, asset management and investment funds sectors.
Introduction
In 2010, the US enacted the Foreign Account Tax Compliance Act (FATCA), rules designed to use foreign financial institutions (FFIs) to combat tax evasion by US taxpayers with offshore investments. More detailed FATCA rules have since been adopted, the principle consequences of which came into effect from 01 July 2014. The FATCA rules are wide ranging and complex and have a significant impact on non US financial institutions and others.
In particular, FATCA imposes a 30% withholding tax on US related payments made to FFIs unless they identify and annually report information on “financial accounts” held by specified US persons and foreign entities in which US persons hold a substantial (ie generally greater than 10%) or controlling (ie generally greater than 25%) interest:
to the IRS under a FFI agreement entered into with the US or
to their national tax authority or the IRS under national legislation implementing FATCA, where the FFI is in a jurisdiction that has entered into an intergovernmental agreement (IGA) with the US.
Similar automatic tax information exchange measures have been introduced by the UK, on a bilateral basis, with the UK Crown Dependencies and British Overseas Territories and on a multilateral basis between certain EU jurisdictions. Meanwhile, the OECD has put forward a Common Reporting Standard, based on FATCA, which has received widespread support and is expected to replace the UK’s bilateral arrangements from September 2017.
What’s new
CbC Competent Authority Agreement signed
31 countries have signed an agreement to share of Country-by-Country (CbC) reports produced by multinationals in their jurisdictions to other signatory jurisdictions in which the multinational group does business.
Foreign Account Tax Compliance Act, the Common Reporting Standard and international automatic exchange of information
A review of the current state of play of FATCA, UK implementation and other OECD and EU automatic exchange of information developments.
CRS implementation: Cayman Islands update
The Cayman Islands’ Government has issued guidance on the implementation of CRS reporting requirements, including the period of overlap with UK FATCA during 2016.
The Common Reporting Standard (Global FATCA): how fund managers should prepare
With the commencement date for the OECD Common Reporting Standard (CRS) on the horizon, asset managers and investment funds should start to prepare to implement CRS.
Foreign Account Tax Compliance Act and international automatic exchange of information
A review of the current state of play of FATCA, UK implementation and OECD and EU automatic exchange of information developments.
FATCA transitional rules extended
The US has announced a further delay to the implementation of certain Foreign Account Tax Compliance Act (FATCA) obligations, including those imposing withholding tax on gross proceeds and foreign passthru payments.
FATCA and holding companies: HMRC guidance
HMRC has provided guidance on holding companies and treasury companies operating as the registered lead FI for FATCA reporting purposes.
Cayman FATCA portal open for registration
The Cayman Islands has opened its online Automatic Exchange of Information Portal to enable “reporting” Cayman Islands financial institutions to register by the deadline of 30 April 2015 for US and UK FATCA purposes.
Practical guide to dealing with FATCA in bank lending transactions
An overview of developments in market practice towards FATCA in bank lending transactions, and practical approaches to dealing with FATCA issues.
Updated FATCA Project Plan
An updated FATCA Project Plan will identify what FATCA related steps managers of Cayman hedge funds should be addressing in Q4 2014.
Common Reporting Standard moves a step closer to reality
The OECD’s Common Reporting Standard received further endorsement at the recent Global Forum meeting where 51 jurisdictions signed a multilateral competent authority agreement.
EU Commission proposes EU FATCA
EU Finance Ministers have agreed on a draft directive extending the scope for the mandatory automatic exchange of information between EU tax authorities.
G20 leaders welcome progress on BEPS and CRS
The G20 Finance Ministers have reaffirmed their commitment to the OECD’s BEPS and Common Reporting Standard projects following the G20 Cairns September 2014 meeting at which the OECD presented its progress reports on these topics.
Access all elexica commentary relating to FATCA
ContactHatice Ismail, Martin Shah
SOURCE: http://www.elexica.com/en/Resources/Microsite/FACTA
Cayman Islands Automatic Exchange of Information Update – April 2016
Article by Tim Clipstone, Christopher Capewell, Tim Dawson, Tim Frawley, Patrick Head, Martin Livingston, Alasdair Robertson, Tahir Jawed, Andrew Quinn, Richard Grasby, Harjit Kaur and Michael Gagie From Maples and Calder
Unless otherwise stated, capitalised terms used herein shall have the meaning given to them in prior updates.
FATCA Notification and Reporting Deadlines Extended
The Cayman Islands Department for International Tax Cooperation (“DITC”) has issued an industry advisory advising that it will be adopting a soft approach to the upcoming 30 April notification deadline for US and UK FATCA and 31 May reporting deadline for both US and UK FATCA for 2016.
According to the advisory, Cayman Islands reporting financial institutions that submit notifications for US and UK FATCA to the DITC on or before Friday, 10 June 2016, and file returns for both US and UK FATCA on or before Friday, 8 July 2016, will not attract any adverse consequences or enforcement measures.
The advisory confirms that the soft approach to enforcement of the notification and reporting deadlines for 2016 is in recognition of the first year of compliance for UK FATCA and the recent lack of availability of the AEOI Portal, of which an updated version of the AEOI Portal User Guide has been recently posted on the DITC website.
Common Reporting Standard – Ongoing Due Diligence Obligations
As noted in our prior update of 10 December 2015, the requirements of CRS became operative in the Cayman Islands from 1 January 2016, therefore any account opened in a Cayman Islands reporting financial institution from this date is subject to new account due diligence procedures (including the account holder providing a self-certification as to tax residency) and any account opened before such date is subject to pre-existing account due diligence procedures to identify reportable accounts. Clients are reminded that the due diligence on pre-existing high value individual accounts needs to be completed by the end of this year. CRS reporting in 2017 will therefore cover all high value individual accounts that were pre-existing as of 31 December 2015 and all new accounts opened from 1 January 2016 onwards.
UK FATCA Alternative Reporting Regime
The Alternative Reporting Regime (“ARR”) will only be available for a limited period of time under UK FATCA (before the transition to CRS in 2017) and therefore the DITC will be accepting ARR reporting via an agreed “ARR Election Template”,1 which Financial Institutions may use to provide details of any account holder who has made an election for the ARR, subject to receipt by such Cayman Islands reporting financial institution of a valid self-certification and verification of the account holder’s UK Resident Non-Domiciled status.
Further Updates
It is now anticipated that the DITC will issue CRS guidance notes in Q2 2016. As per our prior update of 10 December 2015 (see footnote 3), these shall be limited to practical aspects of CRS that are specific to Cayman.
For further information or advice on the application of FATCA or CRS, please liaise with your usual Maples and Calder or MaplesFS contact, or any one of our AEOI experts listed above or on our dedicated FATCA and CRS webpage.
