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Cayman Islands: Updates to CbC reporting, BEPS rules

Cayman Islands: Updates to CbC reporting, BEPS rules

Cayman Islands governmental agencies provided an industry update concerning changes to the country-by-country (CbC) reporting and base erosion profit shifting (BEPS) rules, among other items.


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CbC reporting update

It is anticipated that further updates concerning the CbC reporting rules could be announced by the Cayman Islands Tax Information Authority. At present, it does not appear there would be significant changes to the CbC reporting requirements to be reported during 2019  (that is, the return for reporting for the 2018 tax year). However, it does appear the OECD could have notable changes for CbC reporting in 2020 (that is, for the 2019 tax year). 

Economic substance return

The Cayman Islands’ legislative framework for an economic substance law was determined to be in line with the OECD standard for BEPS Action 5, and therefore “not harmful.”

  • Updated guidance notes (version 3.0) are expected to be issued in November 2019 and to include more sector-specific guidance and examples relevant to Cayman businesses.
  • The Cayman Islands Tax Information Authority confirmed that the annual economic substance law notification will be a required, separate filing to be made with the Cayman Islands general business registry’s annual return. The economic substance notification form is expected to be completed via the Cayman Islands economic substance portal (released 17 October 2019).
  • The annual economic substance law return will be due by 31 December 2020. The economic substance return will be submitted via a Cayman economic substance law portal, which is expected “to go live” by July 2020.
  • The Cayman economic substance law became effective 1 July 2019 for relevant entities that were in existence prior to 1 January 2019.

Read a November 2019 report [PDF 129 KB] prepared by the KPMG member firm in the Cayman Islands

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