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CAYMAN FURTHER TIGHTENS FINANCIAL SECTOR REGULATIONS

Government 01 Jul, 2021 Follow News

Minister of Financial Services, Hon. Andre Ebanks

As of June 30th companies in the Cayman Islands registered as general partnerships, limited partnerships, exempted limited partnerships and foreign limited partnerships are now required to ‘notify’ the Tax Information Authority (TIA) of the Department of International Tax Cooperation.

This follows changes to the regulations governing specific areas of the financial services sector.

An official statement says the regulations bring general partnerships, limited partnerships, exempted limited partnerships and foreign limited partnerships into scope for economic substance requirements.

Under the amendments, if the partnership engages in activity that is relevant for economic substance, it also will be required to file an economic substance return.

It also explains that because investment funds, domestic companies, and local partnerships do not conduct relevant economic substance activities, they must notify the TIA but they are not required to file an economic substance return.

The new regulations also mean that partnerships formed on or after 1st July 2021 are required to meet economic substance requirements from the date on which they commence relevant activity. Partnerships formed before that date must satisfy the economic substance test from 1st January 2022.

Hon. Minister for Financial Services and Commerce, André Ebanks, said the regulations address the European Union's tax good governance initiative, which has assessed tax regimes in countries including Cayman, Bermuda, Guernsey, Isle of Man and Jersey. Following the assessment, the EU requested these countries to extend economic substance requirements to partnerships.

"These changes ensure that Cayman remains strong and cooperative with international tax compliance", Minister Ebanks said.


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