International Tax-Co-operation (Economic Substance) Law, 2018

Continuing its ongoing commitment to the development and maintenance of the very highest standards of economic and financial propriety, new legislation has been published by the Cayman Islands Government that embraces a global initiative to combat base erosion and profit shifting (BEPS).

The legislation includes the International Tax-Co-operation (Economic Substance) Law, 2018. The Law provides a broad framework for determining the extent to which it will be necessary for a relevant company conducting relevant business to be able to demonstrate appropriate 'substance' in the Cayman Islands.

We do not consider that structures seeking to exploit BEPS are at all prevalent in Cayman, where tax neutrality and the absence of a network of double-taxation treaties would render such structures largely meaningless, but Cayman is committed as a jurisdiction to assisting the international community in the preservation of standards of fiscal propriety wherever possible.

Walkers has been actively involved from the outset in the development of the legislation and we will continue to work with government and our colleagues in the financial services community to ensure that the rules are clear in their meaning and proportionate in their effect.

Guidance Notes are expected to be released shortly, which will contain the detail necessary for us to properly advise you of the likely impact of the new legislation on your business. We will provide further communications and guidance at that time.

In the interim, please do reach out to your usual Walkers attorney or any of the contacts below to discuss the specific implications of the new Law for your business.


BRITISH VIRGIN ISLANDS
Ashley GunningPartnerT +1 345 914 4251ashley.gunning@walkersglobal.com

CAYMAN ISLANDS
Ashley GunningPartnerT +1 345 914 4251ashley.gunning@walkersglobal.com
Caroline HealPartnerT +1 345 814 4621caroline.heal@walkersglobal.com
Rolf LindsayPartnerT +1 345 914 6307rolf.lindsay@walkersglobal.com

DUBAI
Daniel WoodManaging PartnerT +971 4 363 7912daniel.wood@walkersglobal.com

HONG KONG
Andy RandallManaging PartnerT +852 2596 3305andy.randall@walkersglobal.com

LONDON
Jack BoldarinManaging PartnerT +44 (0)20 7220 4995jack.boldarin@walkersglobal.com

SINGAPORE
John RogersManaging PartnerT +65 6595 4673john.rogers@walkersglobal.com