The Cayman Islands government has formally asked the United Kingdom to extend its membership in the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters (the convention) to the Cayman Islands.
“Our formal request to join comes after many months of substantive discussions between Cayman and the UK, and it underscores our continued commitment to proactive participation in matters related to international tax cooperation,” said the minister for financial services, Wayne Panton.
The convention is a multilateral instrument designed to combat tax evasion and aggressive tax avoidance by allowing member states to assist each other in tax matters. Administrative assistance can range from the exchange of information for tax purposes to the serving of documents.
As is common with international instruments, signatory countries can choose to opt out of certain aspects of the convention but they cannot opt out of the convention’s core elements regarding the exchange of tax information. Cayman will not handle matters related to requests for the recovery of foreign tax claims, or exchange of information regarding local taxes, and social security contributions.
Panton noted that the convention is aligned to the international standard on information exchange for tax purposes, and it therefore represents another major development in the global tax and transparency landscape.
He said he looks forward to officials from Cayman and the UK’s HM Treasury working together to complete the necessary steps for extension.
Cayman Finance, the group that represents the country’s financial services industry, fully supports the minister and the government in the decision to join the convention.
“The financial services industry was consulted, through Cayman Finance, during these discussions and we are confident that the implementation of the bilateral agreements that will arise from the convention will consider the needs of our jurisdiction,” said CEO Gonzalo Jalles.
He added that the convention was a standard adhered to by more than 50 countries, and said it was crucial for our industry to remain aligned with global movements in the direction of automatic exchange of information.