In November 2013, the Cayman Islands Government entered
into a Model 1B Intergovernmental Agreement with the United States
(the IGA) which provides the framework for the implementation of
the US Foreign Account Tax Compliance Act (FATCA) in the Cayman
Islands. Cayman entities are not directly subject to FATCA however
the IGA requires the Cayman Islands to implement legislation
requiring certain Cayman entities to identify and report US
accounts as set out in this Guide.
The IGA requires that Cayman Financial Institutions report to
the Cayman Islands Tax Information Authority (TIA). The TIA will
automatically pass that information on to the United States
Internal Revenue Service (IRS). A Cayman Financial Institution that
complies with the Cayman Islands laws implementing the IGA will,
under US law, be "deemed compliant" with the requirements
of FATCA and will not be subject to the 30% withholding tax which
may otherwise be applied.
