The government of the Cayman Islands has announced that satisfactory progress is being made in negotiations with the UK aimed at limiting the potential damage to the jurisdiction’s offshore sector by the provisions of the European Savings Tax Directive.
The Cayman Islands Government believes both implementation options (exchange of information or a withholding tax) could have serious and damaging consequences for its economy.
Consequently, the Cayman Islands' commitment to implement depends on two conditions being met: First, all countries must implement at the same time - there must be a level playing field; and second, the British Government should develop detailed proposals to mitigate the Directive's detrimental economic impacts.
“We are continuing our discussions about offsetting benefits with HM Government. Progress is being made and both parties are co-operating warmly," McKeeva Bush, Leader of Government Business, observed in a statement earlier this week.
He added: “Cayman is confident of receiving further detailed and specific information from HM Government on offsetting measures, which would have real and tangible benefits to the people and business of our islands.”
Mr Bush continued: “Our position is unchanged and we are happy that the British Government is moving to meet our concerns. If discussions proceed as we hope, we are satisfied that the offsetting measures we will agree with HM Government will outweigh the costs of implementing the Directive in the Cayman Islands. This outcome will be good news for our financial services industry and further strengthen our position as a world leading financial center.”
The Cayman leader expressed confidence that an agreement will be struck with the British government to enable appropriate legislation to be drafted before June 30. This will then allow sufficient time for the EU directive to be implemented by the Cayman Islands before the December 31 deadline, explained Mr Bush.
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