Japan-Cayman Islands TIEA Enters Into Force

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

20 October 2011

The comprehensive tax information exchange agreement (TIEA) between Japan and the Cayman Islands, which was originally signed on February 7 this year, will come into force on November 13, 2011.

It was disclosed that, on October 14, Japan notified the Cayman Islands of the completion of its internal procedures necessary for the entry into effect of the TIEA. On the same date, the Japanese Embassy in the United Kingdom received a similar notification from the Cayman Islands.

It was said that the TIEA provides a detailed mechanism for the exchange of tax information, with a view to preventing cross-border fiscal evasion and tax avoidance. Following similar agreements with Bermuda, The Bahamas and the Isle of Man, it is the fourth bilateral TIEA that Japan has concluded, while the Cayman Islands has recently signed its 26th (with China).

An agreed allocation of taxation rights with respect to individual incomes is also attached to the agreement. That will provide for tax exemptions with respect to income received by pensioners, students and government employees who are also residents of Japan, with the purpose of avoiding double taxation and promoting the exchange of individuals between Japan and the Cayman Islands.

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