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Cayman Islands

14 January 2021

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Cayman Islands Issues Industry Advisory on Economic Substance

The Cayman Islands Department for International Tax Cooperation (DITC) issued an industry advisory on 11 January 2021 concerning economic substance updates, including extended deadlines for economic substance (ES) reporting for the first year. The deadlines according to the obligation and period end date are as follows:

  • ES returns (all except IP Business) for periods ending 31 December 2019 to 30 April 2020 - 30 April 2021 deadline
  • ES returns for periods ending 1 May 2020 onwards - 12 months after the period end date
  • ES returns for IP Business and tax resident in another jurisdiction (TRO) for periods ending 31 December 2019 to 29 February 2020 - 28 February 2021 deadline
  • ES returns for IP Business and tax resident in another jurisdiction (TRO) for periods ending 1 May 2020 onwards - 12 months after the period end date

Further information is provided as follows:

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Economic Substance Updates

The Department for International Tax Cooperation (DITC) advises industry of the following updates related to Economic Substance (ES) matters.

Economic Substance Notifications

As outlined in the practice points, ESN Year 2019 will remain available on CAP until 31 January 2021. Industry are encouraged to review the industry advisory dated 12 November which outlines the five principal errors the DITC have noted on the ESNs filed for ESN Year 2019. ESNs which have these errors should be resubmitted as soon as possible.

Outsource Service Providers (OSPs)

Industry is reminded that, as outlined in the industry advisory dated 26 November, the DITC Portal is open for registrations of outsource service providers (OSPs). Please refer to that industry advisory for more details.

Please further note that in order to appear in the drop down on the ES Return, the OSP needs to activate their profile. Please follow the steps in the User Guide to ensure this process is completed correctly.

DITC Portal Update

It is anticipated that the ES Return and the Form for an Entity Tax Resident in Another Jurisdiction (TRO) will be added by the end of this month.

Responsible persons who already have an account on the DITC Portal (for CRS/FATCA reporting) will see their ES entities automatically added to that profile once ES reporting becomes available. Responsible persons who do not already have an account will receive an activation email from no-reply@ditc.ky. Please have your IT Team ensure that the email and the IP address (74.222.80.174) from which activation emails are being sent have not been blocked.

Industry is advised that there will be no bulk upload option for any of the ES filings available at launch.

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