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Cayman Islands FATCA Update

18 March 2015

On March 18, 2015, the Cayman Islands Tax Information Authority (“TIA”) released v1.0 of the User Guide for the Cayman Islands Automatic Exchange of Information (“AEOI”) Portal.
 
Below are KPMG’s comments and the link to the User Guide.
 
Notification Process
Cayman Islands Reporting Financial Institutions (“Cayman Reporting FIs”) which have Reporting Obligations must notify the TIA by April 30, 2015. Cayman Reporting FIs can elect to notify the TIA of their intention to file both U.S. and U.K. FATCA reports upon their initial notification to the TIA.
 
KPMG Observations
A significant item to note is that as part of the Notification Process, authorization from an “appropriate person” appointing a Principal Point of Contact (“Principal POC”) needs to be uploaded to the Portal.
 
Critically, the authorization should be in the form of a letter, from the Cayman Reporting FI to the TIA on the Cayman Reporting FI’s letterhead identifying and providing authorization to the individual to be assigned as the Principal POC. Information required to be included in the letter is the Cayman Reporting FI’s name, GIIN (if applicable), full name and contact details of person providing the authorization, full name and office address of the Principal POC.
 
KPMG Cayman can submit the notification to the TIA on your behalf as well as submit the U.S. FATCA Report for your Reporting FI(s) for 2015. Please contact us for further details.   
Please see the user guide available from the TIA here
Other Observations
KPMG notes that the UK tax authorities (HMRC) announced on March 11, 2015 that they removed the NIL return reporting requirement for UK Reporting FIs.
 
KPMG notes that the Office of the Chief Counsel at the IRS has stated that submitting a NIL return is “best practice” and that it intends to use non-filing for three consecutive years as an indicator of possible noncompliance.
 
We expect an industry advisory to be issued very shortly by the TIA confirming when the Portal is open for notification and other significant details.