On 20 February 2020, the Cayman Islands enacted the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations, 2020 (the "CRS Amendment") and the Tax Information Authority (International Tax Compliance) (United States of America) (Amendment) Regulations, 2020 (the "FATCA Amendment"). These amendments amend the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations ("CRS Regulations") and the Tax Information Authority (International Tax Compliance) (United States of America) Regulations ("FATCA Regulations") respectively. On 25 February, the Tax Information Authority published a notice updating the list of jurisdictions to be treated as reportable for CRS purposes. This advisory provides a summary of the changes.

Alignment of CRS and FATCA

An entity classified as a "Financial Institution" under the CRS Regulations is required to appoint: (i) a "Principal Point of Contact" ("PPOC") to engage on behalf of the Financial Institution with the Cayman Islands Tax Information Authority ("TIA"), and (ii) an "Authorising Person", who can notify the TIA of changes to the PPOC.

However, an entity classified as a "Financial Institution" under the FATCA Regulations has hitherto been required to appoint a PPOC only. The FATCA Amendment aligns FATCA requirements with CRS requirements, so that now an entity classified as a "Financial Institution" under the FATCA Regulations is required to appoint an Authorising Person as well as a PPOC. There will be no material change for the vast majority of Financial Institutions in practice, as they will already have an Authorising Person for CRS purposes and will simply extend the terms of the appointment to cover FATCA also.

Ability to appoint entities as PPOCs and Authorising Persons

The amendments also now permit a PPOC and Authorising Person to each be a "person" as opposed to an "individual". As a result, it is now possible for legal persons, as well as natural persons, to be designated as the PPOC and Authorising Person pursuant to the CRS Regulations and the FATCA Regulations.

It remains the case that the PPOC and Authorising Person cannot be the same "person". However, the amendments do provide additional flexibility, enabling a Financial Institution to, for example, appoint a legal person as Authorising Person and an individual as PPOC (or other variations on the theme). There will be no material change for Financial Institutions in practice, as existing PPOC and Authorising Person appointments of individuals continue to be permitted.

Extension of filing deadline for reports

The deadline for the filing of AEOI reports has been formally amended to 31 July of each year. Financial Institutions were previously required to file a report by 31 May each year.

Updated list of reportable jurisdictions

On 25 February, the Tax Information Authority published a notice updating the list of jurisdictions to be treated as Reportable Jurisdictions for the purposes of the Common Reporting Standard contained in Schedule 1 of those regulations for the purposes of the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations. Further to the notice, Albania, Ecuador, Kazakhstan, Maldives, Nigeria, Oman, and Peru will be Reportable Jurisdictions for reports due in 2020 onwards.

Conclusion and Contacts

Walkers has a dedicated global Regulatory & Risk Advisory practice group that can offer legal advice and guidance in connection with all aspects of AEOI compliance. Through its affiliate, Walkers Fiduciary Limited, Walkers can assist clients with customer due diligence, filing obligations and provide PPOCs and Authorising Persons for clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.