Above: Georgetown (CJ Photo)

By the Caribbean Journal staff

The government of the Cayman Islands and the territory’s private sector are working to prepare for the implementation of the United States’ Foreign Account Tax Compliance Act.

Cayman currently has a task force evaluating the suitability of a government-to-government reporting arrangement with the United States, and said Cayman’s local financial services industry is making its necessary preparations for managing FATCA.

“Government is aware of FATCA developments, including the recent publication of the US Treasury’s Model 1 Intergovernmental Agreement to Improve Tax Compliance and to Implement FATCA,” said Samuel Rose, representing the task force. “The Model 2 Intergovernmental Agreement, now in development with the US Treasury, Japan and Switzerland, also is expected to be released soon.”

FATCA contains language directed toward foreign financial institutions (FFIs), requiring them to be prepared to meet the law’s proposed compliance regulations, regardless of whether a foreign government has a reporting agreement in place.

“Government understands that the FFIs in the Cayman Islands are well on their way to ensuring that they are taking the necessary measures to comply with FATCA,” said Rose, who is the deputy chief officer in the Ministry of Finance.

The law has a number of Caribbean governments preparing for its implementation.

“Government is keeping track of the discussions surrounding FATCA and evaluating both information and dialogue in order to make the best choice for our jurisdiction regarding a reporting arrangement,” said Cayman Premier McKeeva Bush. “We will be in a position to decide on the best way forward once the Model 2 Intergovernmental Agreement is published, and we have been able to fully evaluate all the options.”

He said Cayman’s government was encouraging FFIs in the Cayman Islands to move ahead with their preparations for the implementation of the law.

Cayman’s FATCA task force includes the office of the financial secretary, the Attorney General’s chambers, the Tax Information Authority, the Cayman Islands Monetary Authority and the Ministry of Finance.

FATCA goes into effect in 2013.