The Cayman Islands Financial Services Association said it supports the Cayman Islands Government’s policy decision to go with the automatic information exchange option for the proposed European Savings Directive.
Under the Directive, countries may choose a withholding tax or automatic information exchange regimes.
Although the European Commission encourages countries to opt for automatic information exchange, it is understood that a minority of jurisdictions have considered the withholding tax option which would not require information to be exchanged with the relevant EU Tax authorities.
However at present the Cayman Islands Government has opted not to go with the withholding tax regime, it said.
“Should the Directive become fully implemented as planned in January 2005, we believe that automatic information exchange would be consistent with the Cayman Islands promotion of transparency in its financial services industry”, says Eduardo D’Angelo P. Silva, a Director of CIFSA.
According to CIFSA, Cayman would have no particular issues with sharing information because the jurisdiction does not encourage tax evasion. This view is also supported by the Government, it said.
“We have always set a high standard of integrity and we do not intend to change that policy now” says the Honourable George McCarthy, Financial Secretary of the Cayman Islands who agrees with the CIFSA statement. “Information exchange would not pose a difficulty to the vast majority of our industry”, he continues.
Since the EU Commission introduced the proposed Directive, there has been active debate in Cayman and in other jurisdictions regarding whether the withholding tax, automatic information exchange or indeed some mix of the two would be in the best interest of their respective financial services industry.
CIFSA believes that the automatic information exchange would provide clarity and a greater degree of certainty to clients and has significant support across the industry in general.