New rules bring partnerships into line with EU demands

| 30/06/2021 | 13 Comments
Cayman News Service
European Union Commission building in Brussels

(CNS): Government has published new regulations that come into force today requiring partnerships to notify with the Tax Information Authority (TIA) and where relevant file an economic substance return to ensure this jurisdiction can continue to do business in the European Union. Financial Services Minister André Ebanks said the rules address the EU’s Tax Good Governance initiative, which has assessed tax regimes in countries, including Cayman, Bermuda, Guernsey, Isle of Man and Jersey. Following the assessment, the EU requested these countries extend economic substance requirements to partnerships.

“These changes ensure that Cayman remains strong and cooperative with international tax compliance,” Ebanks said in a release about the new regulations, which cover general partnerships, limited partnerships, exempted limited partnerships and foreign limited partnerships.

Because investment funds, domestic companies and local partnerships do not conduct relevant economic substance activities, they must notify with TIA but they are not required to file an economic substance return. Partnerships formed on or after 1 July 2021 are required to meet economic substance requirements from the date on which they commence relevant activity. Partnerships formed prior to 1 July 2021 must satisfy the economic substance test from 1 January 2022.

International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2021

International Tax Co-operation (Economic Substance) (Prescribed Dates) (Amendment) Regulations, 2021

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Category: Business, Financial Services

Comments (13)

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  1. Anonymous says:

    Perhaps, after hosting scam after scam in our SEZ we could raise the bar of scrutiny to avoid more SEC headlines and sanctions. Elsewhere it’s called anticipation and proaction. We still can’t demonstrate competence.

  2. Anonymous says:

    Recent news articles about Cayman Crypto companies being warned by overseas regulators….. yet CIMA is silent on it. Another pathway to the black list.

  3. Anonymous says:

    Your article might be a little clearer for those of us not intimately familiar with the topic.

    • Anonymous says:

      2:20, There are lots of articles available, you just have to look.

      Those who can read have a clear advantage.

      • Anonymous says:

        One would think the article could discuss the ramifications of this move without requiring the reader to research the issue. Perhaps a substantive comment from someone in the business would be helpful, unlike your comment.

  4. Anonymous says:

    I wonder how many 60:40’s are not.

    • Anonymous says:

      The great irony is that every time they are not THAT IS MONEY LAUNDERING!

      (But of course no one cares).

  5. Anonymous says:

    And CIMA still think its about money laundering.

    When will they eventually understand that the EU seeks to destory any place that doesnt adhear to their tax laws? Regardless of what regulation CI publishes, they simply ask for more.

  6. Anonymous says:

    Let’s see what they ask for next………….

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