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Global Legal and Professional Services
ADVISORYIndustry Information
Update in Respect of Cayman IslandsEconomic Substance Requirements
Positive Outcome of Assessment of the Cayman Islands On 23 July 2019, the OECD Inclusive Framework on BEPS published the results of OECD level reviews of the economic substance legal framework of the Cayman Islands and other OECD-compliant jurisdictions with no or nominal tax. The outcome is positive, with the Cayman Islands’ legislative framework for economic substance judged to be in line with OECD standards. The legislative frameworks of Bermuda, the British Virgin Islands, Guernsey and Jersey were also judged to be in line with OECD standards.
In terms of next steps, there will be an annual monitoring process at OECD level to cover any changes in the legal framework, as well as the implementation of safeguards and enforcement measures in practice.
Draft legislative amendments are expected to be issued for consultation in August with a view to the Cayman Islands being considered by the OECD as having a fully equipped monitoring mechanism.
Economic Substance Guidance Update
An updated version of the Tax Information Authority’s Guidance on Economic Substance for Geographically Mobile Activities (“ES Guidance”) is being prepared in consultation with industry working groups over the coming weeks. The new version of the ES Guidance will include sector specific guidance for each relevant activity, as well as in respect of the exemption for investment funds, and is expected to be published after summer.
1 August 2019
The Cayman Islands Department for International Tax Cooperation (“DITC”) has issued an industry advisory regarding developments in relation to economic substance requirements. Our advisory with an overview of the economic substance requirements can be viewed here and our subsequent update can be viewed here.
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DisclaimerThe information contained in this advisory is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.
Lucy FrewPartner - Cayman IslandsT: +1 345 814 4676E: [email protected]
Christopher CarrollAssociate - Cayman IslandsT: +1 345 914 6389E: [email protected]
Tony De QuintalSenior Counsel - Cayman IslandsT: +1 345 914 6388E: [email protected]
Colm DawsonAssociate - Cayman IslandsT: +1 345 914 6384E: [email protected]
Alice MolanPartner - Hong KongT: +852 2596 3425E: [email protected]
Sara HallPartner - LondonT: +44 (0)20 7220 4975E: [email protected]
Andrew HowarthAssociate - Cayman IslandsT: +1 345 814 4561E: [email protected]
Anne DolanDirector - Cayman Islands T: +1 345 814 7620E: [email protected]
Judith WatlerDirector - Cayman IslandsT: +1 345 914 6330E: [email protected]
Steven ManningDirector - Cayman IslandsT: +1 345 814 7612E: [email protected]
Professional Services
ContactsWalkers has a dedicated global Regulatory & Risk Advisory practice group of regulatory lawyers that can offer legal advice and guidance in connection with all aspects of the economic substance regime as it continues to evolve. Through its affiliate, Walkers Professional Services, Walkers is also committed to providing economic substance solutions that will enable all clients impacted by the regime to satisfy the necessary requirements for substance in the Cayman Islands, including notification and reporting.
For further information please speak with your usual Walkers contact:
Legal Services - Regulatory & Risk Advisory
