The Cayman Islands Department for International Tax Cooperation ("DITC") issued an industry advisory on 2 March 2020 (the "Advisory") highlighting a number of updates with respect to FATCA and CRS (together, "AEOI") compliance, including an amended deadline for reporting by Cayman Islands Financial Institutions ("Cayman FIs"), and an update on the status of the AEOI Portal (soon to be replaced by the DITC Portal).
This Advisory follows recent updates to the Cayman Islands AEOI regime, pursuant to amendments to FATCA and CRS regulations. Specifically, the Tax Information Authority (International Tax Compliance) (United States of America) (Amendment) Regulations 2020 (the "FATCA Amendment Regulations"), and the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations 2020 (the "CRS Amendment Regulations"), effective 20 February 2020 (together, the "AEOI Amendments").
Reporting Deadline The AEOI Amendments have seen the annual reporting deadline for both FATCA and CRS reporting for Cayman FIs change from 31 May to 31 July annually, in respect of the year following the calendar year to which the return relates. The notification / registration deadline of 30 April remains unchanged.
The Advisory communicated a further update to the reporting deadline for reporting due in 2020, in respect of the 2019 financial year. The AEOI Portal is currently offline and a new DITC Portal is under development, but will not be available until June 2020. As a result, the reporting (only) deadline for 2019 under both FATCA and CRS has been extended to 18 September 2020.
Further AEOI Amendments The AEOI Amendments made a number of other notable updates to the Cayman Islands AEOI regime.
(a) the FATCA Amendments introduced the concept of an Authorised Person to the FATCA regime, in addition to the CRS regime. The role of the Authorised Person is to liaise with the Tax information Authority ("TIA") when a Principal Point of Contact ("PPOC") is changing;
(b) the AEOI Amendments now permit a 'person' (which can include a legal person or entity) to be appointed as an Authorising Person or a PPOC, rather than an individual. This is a significant benefit to Cayman FIs, as the functions can be undertaken by authorised persons within an entity, without transitions interrupting the continuity of the role; and
(c) the CRS Amendment Regulations amended regulation 9, concerning returns made to the TIA, to require Cayman FIs making returns to provide "information reasonably required by the Authority to ensure effective implementation of, and compliance with, the reporting and due diligence procedures in accordance with the Common Reporting Standard" (a "CRS Compliance Declaration"). It is not yet clear what form the CRS Compliance Declaration will take, however we expect further detail on this to be published by the TIA in due course.
Additional Updates The list of Reportable Jurisdictions under CRS was updated and expanded by Issue No. 14 of the Extraordinary Gazette, published 25 February 2020. Notably, Ecuador, Kazakhstan, Maldives, Nigeria, Oman and Peru will be Reportable Jurisdictions for reports due under CRS in respect of 2020 onward.
The DITC has confirmed it intends to work with the OECD to implement a CRS Compliance Programme. This CRS Compliance Programme is expected to involve, among other measures, the TIA reviewing filings by selected Cayman FIs to ensure these Cayman FIs are compliant with the CRS requirements. Automatic penalties for late filings may result.