(Cayman Compass) -- To avoid a blacklisting, Cayman last year committed to addressing concerns that it violated the EU’s fair tax criterion. According to the EU, jurisdictions should not facilitate offshore structures that attract profits without having real economic activity, like staffed offices or the presence of key decision-makers.
The Crown Dependencies of Jersey, Guernsey and the Isle of Man face similar accusations. They consulted local businesses last month on their views on proposed new legislation that will require certain tax-resident companies to demonstrate they have sufficient substance.
The legislative proposals vary depending on the industry, but suggest that key management decisions must be taken locally through a physical presence.
Ms. Rivers noted that the ministry will launch a similar public consultation within the next few months, after draft legislation has been prepared.
“This visit allows important face-to-face dialogue with EU officials about their concerns, and Cayman’s efforts to date to develop proposals and appropriate legislation to address these concerns,” Minister Rivers said.
Cayman and the other jurisdictions aim to have legislation in place by the end of 2018 that will address the EU’s concerns.
Although the EU Code of Conduct Group did not issue further guidance until June 2018, the ministry said it had engaged with both local and EU stakeholders since December 2017.
“The Ministry has been working steadily with financial services industry representatives, international legal counsel, and Government entities including theCayman Islands Monetary Authority and the Ministry of Commerce, in preparation for our legislative proposals,” Minister Rivers said. “I thank all of the participants for continuing to provide input into this process.”
Accompanying Minister Rivers to Brussels is the Department of Financial Services Policy and Legislation’s Director Michelle Bahadur, and the department’s special projects coordinator Anna Goubault.