Alternative Investment Management Association Welcomes The Decision Of The European Union To Remove The Cayman Islands From Its List Of Non-Cooperative Jurisdictions For Tax Purposes
AIMA welcomes the decision of the Council of the European Union to remove the Cayman Islands from the EU list of non-cooperative jurisdictions for tax purposes.
The full review process carried out by the Council’s Code of Conduct Group (CoCG) since 2018 determined that, by enacting economic substance legislation in line with OECD requirements, the Cayman Islands satisfied the Council’s criteria in line with international tax standards in all respects. However, in extending the concept of economic substance to the regulation of collective investment vehicles, the CoCG required further modifications to limited regulatory measures. Although these were in the course of being implemented, the Cayman Islands were included on the EU list on 18 February 2020. The removal of the Cayman Islands from the EU list has been made at the first subsequent opportunity.
AIMA Cayman members, as part of the Cayman financial services industry, worked with the Cayman Islands government to address the requirements of the EU while protecting the interests of the Cayman Islands as a leading investment fund domicile.
The Cayman Islands fully support the work of the EU and the OECD under the BEPS Project and other initiatives to promote tax good governance. They have, for many years, participated actively in the Global Forum for Transparency and Exchange of Information, as well as international and regional task forces addressing corruption, money laundering, and terrorist financing. The Cayman Islands were among the first jurisdictions to conclude a FATCA intergovernmental agreement with the US and they operate the OECD Common Reporting Standard. The Cayman Islands maintains a registry of beneficial ownership information that is provided to the governmental agencies of participating jurisdictions on demand.
The Cayman Islands have developed their position as a leading international financial center by establishing an effective and appropriate regulatory regime, and AIMA supports the policy of the Cayman Islands to work with international bodies to address developing global initiatives.
Ronan Guilfoyle, AIMA Cayman Chairman, commented: “This action by the EU acknowledges that the regimes established by the Cayman Islands for fund regulation and the wider economic substance requirement, as well as those for the exchange of tax and financial information, anti-money laundering and related measures are fully in line with international standards.”
Jack Inglis, AIMA CEO commented: “The Cayman Islands have been at the forefront of tax transparency in the asset management industry and the EU’s decision is a recognition of the jurisdiction meeting the most stringent conditions. This is good news for the alternatives industry, given the importance of the Cayman Islands as a fund and services center globally.”