Economic substance regime extended to partnerships – Finance and Banking


Cayman Islands: Economic substance regime extended to partnerships

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On June 30, 2021, the government of the Cayman Islands released the International Fiscal Cooperation (Economic Substance) Regulations 2021 (Schedule Amendment).1. The main regulatory change is the addition of partnerships to the definition of a “relevant entity”. The categories of relevant activities and exempt activities remain unchanged. Please refer to our previous customer update2 for more information on relevant activities.

Partnerships formed on or after June 30, 2021 are required to meet the criterion of economic substance from the date on which they start a relevant activity. Partnerships formed before June 30, 2021 must pass the economic substance test from January 1, 2022. All partnerships, regardless of their date of incorporation, will be required to inform the Authority. tax information no later than January of each year of their activities in the jurisdiction. during the previous year.

Cayman Islands government press release

A copy of the July 1 press release from the Cayman Islands Department of Financial Services is available here.

The new regulations address the European Union’s tax good governance initiatives and ensure that the jurisdiction remains cooperative and committed to complying with international tax measures.

Footnotes

1 International Tax Cooperation (Economic Substance) (Prescribed Dates) (Amendment) Regulations 2021

2 https://maples.com/en/knowledge-centre/2020/9/cayman-islands-update- economic-substance-guidance-notes-v3-issued

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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