London

Greenwich

New York

Geneva

Hong Kong

Milan

New Haven

CAYMAN FUNDS CONFERENCE

International Tax Developments and Implications forInternational Clients

Joseph A. Field

Senior Regional Partner - Asia

Withers - Hong Kong

Ritz Carlton Hotel, Grand Cayman

14 January 2010

Topics to be Discussed

What was 2009 all About?

Was this a US Phenomenon?

What does this mean for International People?

Where do we go from here?

A Few Surprises

A Few Conclusions

WHAT WAS 2009 ALL ABOUT?

The Great Recession

• Tremendous loss of value

• Tremendous loss of confidence

• Giant Government bailouts

Lehman Brothers

AIG

Merrill Lynch

Royal Bank of Scotland

WHAT WAS 2009 ALL ABOUT? (II)

The Government Needs to Show it Hates Crooks• Liechtenstein and Germany

• The US and Switzerland

• Argentina and Morgangate

What to do?• Go after hidden accounts

• Show how much revenue you have collected (even

though the costs may outweigh the returns)

WHAT WAS 2009 ALL ABOUT? (III)

Voluntary Disclosure (VD)

• An old programme

• The new one has teeth

FBARs

• Not a tax issue

• The bite can be brutal

• Some new definitions

WHAT WAS 2009 ALL ABOUT? (IV)

Who has been attacked?

• The 4400

• Others

How much revenue have collected (even though

the costs may outweigh the returns)?

WAS THIS A US PHENOMENON?

No, it started in Germany

It is a worldwide event

• Offshore jurisdictions encouraged to sign TIEA’s

• Hong Kong and Singapore have signed agreements

with OECD

• Liechtenstein has followed suit

British, French, Spaniards all gone after evaders

WHAT DOES THIS MEAN FOR INTERNATIONAL PEOPLE?

Occult offshore accounts no longer flavour of the

month

Banks will cooperate with governments

Governments will comply with international

standards

• Hong Kong and Singapore examples

• Swiss – US agreement

WHAT DOES THIS MEAN FOR INTERNATIONAL PEOPLE (II)

For US citizens, a nuclear winter

• New enforcement measures

• Greatly increased staff

• Jail for even little bad guys

• Can you open a bank account?

WHERE DO WE GO FROM HERE?

Greatly increased scrutiny – e.g. UK reporting

requirements for banks

New, enhanced ‘QI’ rules

Jail for tax cheats

Much greater exchange of information

Who is still hiding out there?

WHERE DO WE GO FROM HERE? (II)

Much of Stop Tax Haven Abuse Act shall be law

Strong anti-offshore sentiment

Willingness to make example of ‘innocent’

people

PS - They may fight back

A FEW SURPRISES

The UK and Liechtenstein

The SEC joins the fray

US Estate and Generation Skipping Taxes

A FEW CONCLUSIONS

We have undergone a tectonic change

The OECD is on a roll (and won’t give up)

The US is on a roll (and feeling juicy)

Obama (and Cayman’s friend Carl Levin) approve

Europe needs the money

Bend with the wind – or be cut down