Cayman Islands Signs 12th TIEA With New Zealand

by Mary Swire, Tax-News.com, Hong Kong

19 August 2009

The Cayman Islands has signed its 12th tax information exchange agreement (TIEA) with New Zealand, and moved onto the “white list” of countries that have “substantially implemented” the OECD’s internationally agreed tax standard.

The Cayman Islands’ Leader of Government Business/Premier Designate, McKeeva Bush, said: “For over four decades the Cayman Islands has steadily earned its place as a world-class international financial services center. The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information."

"The Cayman Islands Government is looking forward,” Bush continued, “to working in partnership with competent authorities in implementing agreements it has signed, concluding additional agreements with Cayman’s important trading partners in financial services, and continuing its active role in the OECD Global Forum, which it committed to in 2000."

Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing, and said that the OECD looked forward to working further with the Cayman Islands as it extends its network of agreements and works to implement them swiftly and effectively.

New Zealand’s Revenue Minister, Peter Dunne, said: “Recent months have seen a flurry of TIEA signings internationally, as low-tax offshore financial centers seek to achieve a sufficient number of TIEAs to allow them to be seen as meeting the OECD's standards.”

Referring also to the TIEAs that New Zealand had signed with the British Virgin Islands and Gibraltar, he added: "I welcome the signing of this latest group of TIEAs, which brings to eight the number of these agreements New Zealand has entered into this year."

The TIEA allows the authorities in both countries to request direct tax records, business books and accounts, bank information, ownership information, and other tax-related information for the purpose of detecting and preventing tax avoidance and evasion by each other’s residents. Such information shall be that which is relevant to the determination, assessment and collection of direct taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters.

The TIEA also includes an agreement for the allocation of taxing rights with respect to certain income of individuals (including pensions), and provisions to establish a mutual agreement procedure in respect of transfer pricing adjustments. It will enter into force after notification by both parties, after which it will have effect for taxable periods beginning on or after the following January 1.

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