Workshop on EOI – Florida, July 2012 __________________________________________________________________________________ Duncan Nicol Director, Tax Information Authority Cayman Islands Competent Authority Tax Tax Information Information Authority Authority Cayman Islands

Workshop on EOI – Florida, July 2012 _____________________________________________________________ Authority for Exchanging Information Tax Tax Information Information Authority Authority Cayman Islands

Authority for Exchanging Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Legal Authority for EOI Legal Authority for EOI International sources of authority for EOI International sources of authority for EOI Domestic sources of authority for EOI Domestic sources of authority for EOI Practical Issues Practical Issues Tax Tax Information Information Authority Authority Cayman Islands

Authority for Exchanging Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Legal Authority for EOI – EOI for tax purposes is based on a relationship of agreed cooperation between jurisdictions – EOI cannot take place without valid legal authority – Legal authority must exist at the international level (external) – Legal authority must exist at the domestic level (internal) Tax Tax Information Information Authority Authority Cayman Islands

Authority for Exchanging Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ International Sources – DTA - Article 26 OECD Model Tax Convention – TIEA - OECD Model Agreement 2002 – Multilateral Instrument Global – e.g. OECD / Council of Europe Convention Global – e.g. OECD / Council of Europe Convention Regional - e.g. EU Directives Regional - e.g. EU Directives – Unilateral mechanisms – FATCA Tax Tax Information Information Authority Authority Cayman Islands

Authority for Exchanging Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Domestic Sources – Ratification – Implementing Legislation Authority to obtain information for EOI Authority to obtain information for EOI Authority to exchange information for EOI Authority to exchange information for EOI – Designation of Competent Authority Tax Tax Information Information Authority Authority Cayman Islands

Authority for Exchanging Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Practical Issues – Is it in force? Legal authority for EOI both external and internal is of no effect unless the international instrument and domestic legislation are in force Legal authority for EOI both external and internal is of no effect unless the international instrument and domestic legislation are in force – Is authority for EOI restricted? Make sure there are no laws curtailing the legal authority for EOI Make sure there are no laws curtailing the legal authority for EOI – Delegated powers Named persons having authority to carry out EOI need to be identified Named persons having authority to carry out EOI need to be identified Tax Tax Information Information Authority Authority Cayman Islands

Workshop on EOI – Florida, July 2012 _____________________________________________________________ Scope of Exchange of Information Tax Tax Information Information Authority Authority Cayman Islands

Scope of Exchange of Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ “The standards provide for exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.” OECD Global Forum Assessors Handbook (2 nd Ed.): “Implementing the Tax Transparency Standards” Tax Tax Information Information Authority Authority Cayman Islands

Scope of Exchange of Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Article 26 – OECD Model Tax Convention on Income and on Capital: “The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention.” Tax Tax Information Information Authority Authority Cayman Islands

Scope of Exchange of Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Article 1 (Object and Scope) Model Agreement on Exchange of Information on Tax Matters: “The competent authorities of the Contracting Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safeguards secured to persons by the laws or administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.” Tax Tax Information Information Authority Authority Cayman Islands

Scope of Exchange of Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Commentary on Article 1: “The Agreement is limited to exchange of information that is foreseeably relevant to the administration and enforcement of the laws of the applicant Party concerning the taxes covered by the Agreement. The standard of foreseeable relevance is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Contracting Parties are not at liberty to engage in fishing expeditions or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. Parties that choose to enter into bilateral agreements based on the Agreement may agree to an alternative formulation of this standard, provided that such alternative formulation is consistent with the scope of the Agreement.” Tax Tax Information Information Authority Authority Cayman Islands

Scope of Exchange of Information Workshop on EOI – Florida, July 2012 _____________________________________________________________ Article 4 - Definition of information: “the term “information” means any fact, statement or record in any form whatever” Commentary on the definition of information: “information”. The definition is very broad and includes any fact, statement or record in any form whatever. “Record” includes (but is not limited to): an account, an agreement, a book, a chart, a table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a telegram and a voucher. The term “record’ is not limited to information maintained in paper form but includes information maintained in electronic form. Tax Tax Information Information Authority Authority Cayman Islands

Tax Tax Information Information Authority Authority Cayman Islands