Three prominent members of the US House and Senate issued a joint press release outlining their proposed legislation to prevent US residents from unlawfully evading taxes. The legislation includes comprehensive proposals to clamp down on tax evasion and improve taxpayer compliance by giving the IRS new administrative tools to detect, deter and discourage offshore tax abuses.
This entirely reflects the confirmations that Cayman Finance have received from key staffers in Washington in that the “list “based approach, favored by Senator Levin’s proposed legislation, appears to have been rejected in favour of a transparency based approach. Whilst the legislative process has not yet got underway we are pleased that these proposals are entirely consistent with the approach suggested by Cayman Finance.
New regulations would force foreign financial institutions, foreign trusts, and foreign corporations to provide information about their U.S. accountholders, grantors, and owners, respectively. Chairman of the Ways and Means Select Revenue Subcommittee, Mr. Richard Neal said ““This bill is a continuation of my efforts to reduce tax evasion by American citizens and bring more transparency to international banking.”
This is obviously very positive news for the Cayman Islands, which has been a fully transparent jurisdiction for the last decade and a leader in regulatory and compliance issues related to global finance. We can only hope this will finally put to rest any and all efforts by G20 nations to portray Cayman as a ‘tax haven’ and that we will not be forced to repeatedly jump through the same old hoops to prove what must now be evident to anyone with knowledge of global financial markets – namely that the Cayman Islands is the last place on earth that individuals would choose for the purpose of evading taxes.
This issue will never be solved, and I am sure that it will never really be put to rest – but this is surely a giant step in the right direction.
Good news! Maybe we are finally getting past the season of political rhetoric and more pragmatic solutions/regulations will be forthcoming.