The Council of the European Union this week announced, following a review of the Cayman legislation on economic substance, an updated list on tax co-operation.
The Council’s release [PDF 265 KB] includes the following comments relevant to the Cayman Islands:
The following jurisdictions, which committed to addressing the concerns relating to economic substance in the area of collective investment funds, have engaged in a positive dialogue with the Group and have remained cooperative, but require further technical guidance, were granted until end 2019 to adapt their legislation:
Bahamas, British Virgin Islands and Cayman Islands
Separately, the European Commission acknowledged that further work will be needed to define acceptable economic substance requirements for collective investment funds under criterion 2.2 and invites continued dialogue and technical guidance for the jurisdictions concerned by mid-2019.
Read a March 2019 report [PDF 120 KB] prepared by the KPMG member firm in the Cayman Islands
In late 2018, the Cayman Islands released a bill—referred to as the “EU Economic Substance” bill—that concerns newly formed entities (entities formed 1 January 2019 or later), and applies for pre-existing entities (in existence prior to 1 January 2019). The effective date is set at 1 July 2019.
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