Cayman Finance Chairman Mr. Richard Coles is refuting a report initially made by US network television station ABC that focused on Presidential candidate Mr. Mitt Romney’s financial affairs linked to the Cayman Islands.
“The report displays a total misunderstanding of the role of the Cayman Islands’ tax neutral framework. All international investors are ultimately responsible for paying their taxes in their home country under their respective laws and there is nothing in the Cayman Islands laws that interferes with that”, said Mr. Coles.
Romney’s campaign confirmed he has money invested in the Cayman Islands, but said he was not getting a tax break.
Mr. Coles explained that not only does the Cayman Islands laws not prevent investors from complying with their tax obligations but that in fact the Cayman Islands are involved in a number of initiatives that encourage full cooperation with US authorities on numerous levels in the area of international cooperation on tax matters. Some of these include; a bilateral agreement that has been in place since 2006, a mutual legal assistance treaty and the Cayman Islands involvement with, and recognition by, the OECD Global Forum which focuses on tax information exchange.
ABC News reported Wednesday that Romney has millions of dollars in investment funds set up in the Cayman Islands. The report said Romney had the ability to pay a lower tax rate by investing in offshore funds.
A spokeswoman for Romney’s campaign confirmed that the Romneys have money in the Caymans. But spokeswoman Andrea Saul also said: “ABC is flat wrong. The Romneys’ investments in funds established in the Cayman Islands are taxed in the very same way they would be if those funds were established in the United States.”
Romney aides declined to say how large his investment in the Caymans is and why it is there, as opposed to in the US; nor would they say whether Romney has investments anywhere else outside the US. Advisers said Romney’s assets are managed on a blind basis and that he does not have control.
We do understand that this is election season in the US and typically these types of reports surface as part of that process but it is unfortunate that despite significant evidence to the contrary, journalists would continue to suggest that the laws of the Cayman Islands encourage avoidance of tax, said Mr. Coles.
“In fact, our tax neutral framework has played an important role in enabling ordinary Americans to efficiently invest via their pension funds and many US corporations have been able to maintain their international competitiveness through the use of Cayman Islands structures.
“We are always happy to explain the nature of our regime to journalists and we continue to welcome their queries on how we conduct financial services business in the Cayman Islands,” said Mr. Coles.