Wednesday, October 28, 2009

US Lawmakers Now Agree with Cayman Approach to Tax Transparency

/PRNewswire/ -- Cayman Finance, representing the financial industry based in the Cayman Islands, today congratulated Chairman Max Baucus of the Senate Finance Committee and Chairman Rangel of the House Ways and Means Committee on their plan to tackle offshore tax abuse through increased transparency and enhanced reporting requirements. The new comprehensive proposal does away with the damaging features of Senator Levin's Stop Tax Haven Abuse Act, which would rely on "lists" and other provisions that would discourage corporations and other financial entities from conducting lawful business in Cayman and providing funding into the United States. "Cayman Finance commends Chairman Baucus, Chairman Rangel and their colleagues for their leadership on this important issue," said Cayman Finance Chairman Anthony Travers. "This proposal is entirely consistent with the approach suggested by Cayman Finance in our many meetings with these and other U.S. policymakers."

The new Senate-House proposal sets in place practices that will clamp down on jurisdictions which still practice tax evasion and improve taxpayer compliance by giving the IRS new administrative tools. The "Foreign Account Tax Compliance Act" aims to force foreign financial institutions, foreign trusts and foreign corporations to provide information about their U.S. accountholders, grantors and owners. The government and financial firms in the Cayman Islands have supplied full financial information and tax information for many years under the 1990 and 2001 treaties with the United States, and take pride in the regulatory and fiscal transparency that is a requirement for IOSCO (International Organization of Securities Commissions) membership. Cayman has also signed tax transparency treaties with the European Union and more than 12 other jurisdictions.

"Cayman Finance is confident that enactment of the U.S. legislation proposed by the two Chairmen will contribute significantly to the certainty and stability that the capital markets require, as well as the ability of the Cayman Islands to continue to successfully fund United States institutions from those markets," Travers said.

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