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The Cayman Islands' Government has announced that it has elected to adopt a Model 1 intergovernmental agreement (IGA) with the United States to facilitate compliance with the US Foreign Account Tax Compliance Act (FATCA).
The Cayman Islands' Model 1 agreement will broadly follow the variation of IGA drafted by France, Germany, Italy, Spain and the United Kingdom with the United States in July 2012.
The announcement was made by the Cayman Minister for Financial Services, Rolston Anglin in the House of Assembly, who added that the model 1 IGA would be used as the basis to negotiate a similar agreement on the automatic exchange of certain information with the United Kingdom. He said the territory expects to conclude final agreements with the US and UK promptly.
He said the IGA - which will mitigate the information reporting burden on Cayman financial institutions through a centralized infrastructure - would ensure Cayman businesses' competitiveness, and highlighted that the adoption of the pacts would reinforce the Caymans' commitment to transparency and exchange of information for tax purposes.
Anglin, who is also the territory's Deputy Premier, commented: "The global landscape in taxation is changing at an unprecedented pace. The modern cooperative and transparent jurisdiction will be one that uses automatic exchange of information mechanisms and multilateral approaches in tax matters, and that demonstrates effectiveness in the implementation of these measures."
In his address to the Legislative Assembly, Anglin noted that the Cayman Islands has already concluded 30 tax information exchange arrangements, with further agreements either technically agreed or awaiting signature. He also pointed out that Cayman has been greatly involved in the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and has served as an active member of the Steering Group and the Peer Review Group since 2009.
"This decision to adopt the Model 1 IGA will fortify our good standing in the global community and continue to build on the solid foundation we already have in place with our existing agreements," Anglin said.
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