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The European Union ("EU") has announced that the Cayman Islands has been removed from Annex 1 of the EU's list of non-cooperative jurisdictions for tax purposes ("Annex 1") following a meeting of the EU's Economic and Financial Affairs Council ("ECOFIN").
The Cayman Islands' continued commitment to implement tax good governance was confirmed in an official statement from the European Council, which recognised that the jurisdiction has appropriate measures in place.
The Cayman Islands' Premier McLaughlin said that the listing had been in relation to investment funds supervision and that "Cayman responded positively by expanding the scope of our funds regime to ensure that the Cayman Islands Monetary Authority, our financial services regulator, has the legal mandate to supervise all Cayman-based investment funds".
Premier McLaughlin reaffirmed that Cayman remains fully committed to international tax good governance standards, and noted that the EU has joined the OECD in positively recognising Cayman's tax regime. The Cayman Islands' economic substance legislation was evaluated in June 2019 by the OECD's Forum on Harmful Tax Practices as "not harmful", which is the highest rating possible. In addition, the jurisdiction is party to multiple bilateral tax information exchange agreements and was one of the earliest adopters of FATCA, CRS, CbCR and the OECD's BEPS economic substance requirements.
The Cayman Islands is a leading centre for financial services and has a robust, internationally recognised regime and market leading regulatory framework. The Cayman Islands has continued to be the jurisdiction of choice for global investment funds and other financial sector businesses.
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