The European Council has announced its decision to remove the Cayman Islands from the EU list of non-cooperative jurisdictions for tax purposes. In February we reported on Cayman’s inclusion on the list and our expectation that Cayman would make every effort to ensure its removal from the list in cooperation with the EU (https://www.proskauertaxtalks.com/2020/02/cayman-islands-added-to-the-eu-blacklist-of-non-cooperative-jurisdictions-for-tax-purposes/).
The Council yesterday (6 October 2020) announced that “[the] Cayman Islands was removed from the EU’s list after it adopted reforms to its framework on Collective Investment Funds last month”. The framework addresses economic substance in relation to collective investment vehicles in accordance with the OECD’s requirements. The Cayman government responded to its inclusion on the list in February by stating that it was added because of a delay in enacting legislation relating to the oversight of collective investment vehicles. This legislation has now been enacted, extending the regulatory reach of the Cayman Islands Monetary Authority, Cayman’s financial services regulator, by bringing particular funds under its jurisdiction. One impact of Cayman’s removal is that it will no longer be a “blacklisted” country for the purposes of the EU tax avoidance disclosure regime known as “DAC 6”.
The Council also announced yesterday that Oman was removed from the EU blacklist and that Anguilla and Barbados have been added.
Please contact any member of our UK Tax group if you have any queries about how the above will affect your business.