George Town, Grand Cayman – Building on
more than a decade of cooperation in tax matters, the Cayman
Islands and the US today signed an agreement that paves the way for
automatic exchange of tax information under US FATCA.
The two governments also signed a new tax information exchange
agreement (TIEA), which replaces the original TIEA signed in 2001.
The new TIEA stipulates the legal channels through which
information will be automatically exchanged.
FATCA, or the Foreign Account Tax Compliance Act, is a US
tax-reporting initiative, developed to assist the US Internal
Revenue Service in preventing tax evasion by US persons living
overseas. Cayman has signed a FATCA Model 1 intergovernmental
agreement (IGA); this enables financial institutions in Cayman to
directly report information to Cayman's Government regarding
accounts and non-financial entities that substantially are owned by
US citizens and residents. Government will then relay the
information to the IRS.
