The Cayman Islands government
has invited representatives of financial institutions and US citizens,
green-card holders and long-term non-residents of the United States
to a tax seminar on 19 April at the Marriott Beach Resort.
The information session is
open to the public and will outline the requirements of the US Foreign Account
Tax Compliance Act that will affect financial institutions and anyone holding a
green card or US
passport, including those with dual citizenship.
FATCA aims to detect US
taxpayers who have not declared income and offshore assets to the IRS by
imposing a 30 per cent tax withholding on payments to foreign financial
institutions, such as banks, investment funds and trusts that fail to identify
US account holders and their assets and report them to the IRS. Compliance with
the Act will represent an additional administrative burden for financial
institutions in the Cayman Islands, as they will have to put in place the
necessary processes and systems to report US account holders, their account
balances and other assets to tax authorities in the US.
Only US passport and
green-card holders will be affected if they have failed to report their income
on an annual basis. The Act, which enters into force in Cayman on 1 January,
2013, introduces new penalties for not filing foreign financial assets as part
of income tax returns. These foreign financial assets include depository or
custodial accounts at foreign financial institutions, as well as interest in a
foreign entity, stocks in foreign companies and financial instruments with
non-US counterparties that are not held in such accounts.
The seminar was first
announced by Premier McKeeva Bush in March following the meeting of a Cayman
government delegation with US Internal Revenue Service and US Treasury
officials in Washington, DC.
Given the many questions
that US taxpayers living and
working in the Cayman Islands have about the
Foreign Account Tax Compliance Act, the government intends to facilitate the
tax seminar to provide clarity about the tax act and to promote compliance, Mr.
The seminar will feature
speakers from Sidley Austin LLP, the Cayman Islands’ legal representatives in Washington. DC, which
also arranged the meetings in March. In addition, representatives from Cayman
law and accounting firms and government officials are scheduled to speak.
The tax seminar is broken
up into a morning session for financial institutions from 9am to 12.30pm and a
separate session from 1.30-5pm for individuals. The sessions are
followed by a networking event from 5-7pm.