On June 7, over 70 countries and jurisdictions have signed, or formally expressed their intention to sign, an innovative multilateral convention. According to former Minister for Cayman's Financial Services Wayne Panton, the effects of the BEPS project on Cayman are relatively “benign,” but the government committed to the initiative “for reputational reasons,” Cayman Compass reported.
The Convention aims to swiftly implement a series of tax treaty measures to update the existing network of bilateral tax treaties and reduce opportunities for tax avoidance by multinational enterprises. The new convention will also strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration, thereby reducing double taxation and increasing tax certainty.
Last year the Cayman Islands adopted the BEPS principles also due to the threat of blacklist of non-cooperative jurisdictions prepared by the European Union. "Non-adherence to the cross-border tax principles is one of the criteria for inclusion on the list, in addition to the ineffective exchange of tax information and unduly low or no tax rates designed to attract profits from other jurisdictions," Cayman Compass reported.
As Cayman Islands committed in principle to the project, former Minister for Financial Services Wayne Panton said that the effects of the BEPS project on Cayman are relatively “benign”. He also informed that the government committed to the initiative “for reputational reasons.”
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