25 July 2012

The Ministry of Finance is issuing this statement in relation to recent public comments made in relation to the US Foreign Account Tax Compliance Act (FATCA).

The US Government has always expected its citizens, wherever they live in the world, to fulfil their obligations and responsibilities to pay their US taxes.

The US Foreign Account Tax Compliance Act (FATCA), which was enacted in March 2010, further strengthens the US Internal Revenue Service’s ability to collect taxes from US citizens; US resident green-card holders; and long-term non- residents.

Again these persons always have been required to file US tax returns and to be compliant with US tax rules, regardless of them having earned income from a US source. FATCA is a global initiative and in no way shape or form singles out the Cayman Islands citizens or residents.

Since FATCA was enacted, the Premier and Minister of Finance, Hon. McKeeva Bush, OBE, JP has directed the Ministry of Finance to take proactive steps to inform persons that are affected by the legislation, as well as the financial institutions that serve these persons, on how to proceed with these matters. These steps include:

Seminars in 2011 to provide general information to relevant businesses and persons living in the Cayman Islands; several international and local presenters clarified FATCA principles and provided responses to audience questions.

Seminars in 2012 to demonstrate how to file tax returns; to keep necessary documentation to include in the filings; and immigration information.

Led meeting in Washington DC with Government representatives, the US Treasury and the IRS in 2011 and 2012, to enhance each jurisdiction’s understanding of how these requirements could be implemented in the most appropriate manner.

The Cayman Islands Government has now established a task force to evaluate the suitability of government-to-government reporting for the implementation of FATCA in the Cayman Islands.

The Cayman Islands Government remains committed to maintaining a high level of engagement and dialogue with US officials on FATCA matters, and will continue to ensure that US citizens and green-card holders living in the Cayman Islands are aware of their obligations to comply with US tax directives.