Above: Georgetown (CJ Photo)

By the Caribbean Journal staff

The Cayman Islands and the United States have concluded talks on an intergovernmental agreement and a new tax information exchange agreement.

Both pave the way for an automatic exchange of information under the US’ new Foreign Account Tax Compliance Act.

A Cayman Islands government statement said both governments had signaled their intent to sign the agreements, with the official signing to be held “as soon as possible.”

The Model 1 Intergovernmental Agreement will “streamline” the reporting of information regarding accounts and non-financial entities “substantially” owned by US citizens and residents.

“As an international financial centre that contributes to the efficient functioning of global markets, the initialling and subsequent signing of the IGA and the new TIEA with the United States will again demonstrate Cayman’s commitment to engage in globally accepted tax and transparency initiatives,” said Wayne Panton, Cayman’s Minister for Financial Services.

Robert Stack, US Treasury Deputy Assistant Secretary for International Tax Affairs, said the two agreements would improve compliance.

“Cayman has had a longstanding relationship with the United States regarding the exchange of tax information, dating back to the original TIEA that was signed in 2001,” Stack said. “Cayman also consistently demonstrates leadership in transparency matters through its global engagement, including it work on both the Steering Group and the Peer Review Group of the OECD Global Forum on Transparency and Exchange of Information For Tax Purposes.”

Cayman will soon have talks with the UK Treasury to finalize the terms of the UK intergovernmental FATCA agreement.

Cayman Finance CEO Gonzalo Jalles said the moves “clarified the way forward, in order for industry to progress with the implementation [of FATCA].”