Cayman and BVI step up tax transparency

August 19, 2009 5:17 AM

The Cayman Islands and British Virgin Islands have forged 12 Tax Information Exchange Agreements, and secured their promotion from the OECD’s grey list on tax standards to a white list of approved jurisdictions.

The most recent agreement, with New Zealand was made on 13 August and follows agreements signed by each nation with the US, UK, Australia, France and Nordic Alliance countries.

Alasdair Robertson of Cayman-based firm Maples & Calder says for the majority of the firm’s clients the nations’ inclusion on the white list of approved jurisdictions will not make a significant difference.

He explains, “A large percentage of our client base is institutional and they understand the dynamics of the current OECD process and that fact that Cayman/BVI are not "havens" for tax evasion. Such clients tend to understand that Cayman and BVI have good legal systems, sensible regulation and a good compliance culture for attracting cross-border institutional business.”

But Robertson acknowledges that “being put on the white list does put the matter beyond doubt and I am sure our clients will welcome this.”

And the firm’s practice, he thinks, may receive a boost, as potential investors’ doubts are allayed. “This will hopefully ensure that certain potential clients (in particular within Europe) that may have had reservations, appreciate the reality and will therefore look to Cayman and BVI entities as vehicles in which they can establish or invest in.”

In April this year, Costa Rica and Uruguay agreed to meet international standards on tax transparency, after being included on the OECD’s tax haven blacklist.

(Source: Magazine LatinLawyer)

August 18, 2009