In an EU Press Release issued on 18 February
2020, the ECOFIN committee of the European Union (“EU”)
resolved to move the Cayman Islands to the EU blacklist of
non-cooperative jurisdictions for tax purposes (the “EU
Blacklist”). The reason given by the EU is that the Cayman
Islands does not have appropriate measures in place relating to
economic substance in the area of collective investment vehicles
(“CIVs”). On 31 January 2020, Cayman passed The Private
Funds Law and The Mutual Funds (Amendment) Law, both of which
address the EU concerns for CIVs, and which were enacted on 7
February 2020. A separate Alert will follow on this
topic.
The EU Blacklist was set up as part of the EU’s strategy
on effective corporate taxation, with a view to improving tax
governance on a global level. Currently (as at 18 February 2020),
the other members of the EU Blacklist are: American Samoa, Fiji,
Guam, Oman, Palau, Panama, Seychelles, Samoa, Trinidad and Tobago,
US Virgin Islands
