The US Department of the Treasury and the Cayman Islands have signed intergovernmental agreements (IGAs) to implement the Foreign Account Tax Compliance Act (FATCA).
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Enacted in 2010, FATCA is designed to fight offshore tax evasion. It seeks to obtain information on accounts held by US taxpayers in other nations.
As per the Cayman Islands IGA, which is a Model 1B agreement, foreign financial institutions (FFIs) in the region need to report tax information about US account holders directly to the Cayman Islands Tax Information Authority.
US Embassy in London economic affairs minister-counselor Julie Nutter, who signed the agreement on behalf of the US, said, "By working together to detect, deter, and discourage offshore tax abuses through increased transparency and enhanced reporting, we can help build a stronger, more stable, and accountable global financial system."
Furthermore, both the parties also signed a new Tax Information Exchange Agreement (TIEA).
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By GlobalData
