Chairman's Blog

Dear Ms. Huffington:

Your recent post citing the Cayman Islands in a list of “tax havens” is unfair and inaccurate.  The Cayman Islands — far from being a “tax haven” — are on the elite OECD global “white list” of jurisdictions that meet the highest standards for financial transparency.

FICTION: The Cayman Islands are a “tax haven.”

FACT: The Cayman Islands has full tax transparency with The United States and with 27 members of the European Union.  The US Department of Justice has had full authority to make enquiry in relation to any file in the Cayman Islands since 1990. The anti-money laundering legislation of the Cayman Islands has been evaluated by the International Monetary Fund and by the Financial Action Task Force and is found to be superior to that Of the United States and most EU jurisdictions.

FICTION: Offshore accounts such as those in the Caymans are used by multinational corporations to avoid paying any taxes or to commit tax fraud.

FACT: American corporations already pay taxes in the jurisdictions where they operate.  Additionally, all profits of subsidiaries of US parents — regardless of where they are incorporated — are consolidated and accounted for and taxable in the U.S. as profits of the parent, except to the extent that legitimate tax deferral applies under current IRS code.
Offshore financial centers, like Cayman, enable American companies to compete internationally and reinvest their profits; treaties with the U.S.
ensure they do not evade taxes.

FICTION: U.S. policies regarding “tax havens” and tax deferral for US multinationals are linked.

FACT: The issues of offshore financial centers and tax deferral for US multinational corporations are separate.  The future of tax deferral laws in the United States is an internal U.S. tax matter.

FICTION: Corporations cheat the public out of tens of billions of dollars a year by using offshore tax havens.

FACT: The financial services sector in the Cayman Islands is enormously important to the economic growth of the United States. Cayman financial services institutions pool funds from the international capital markets and direct those funds into investment opportunities in G20 jurisdictions. The impact of those investments in growing the American economy cannot be overstated.

FICTION: Money flows from the U.S. to the Cayman Islands, where it is hidden.

FACT: The favored location for Cayman funds to invest is the United States; the preponderant flow of capital is from the Cayman Islands into, not out of, the U.S.

Let’s keep the facts straight and avoid name-calling. Most of what Americans think they know about the Cayman Islands is wrong.  It¹s time to learn how our financial services industry is working to promote economic growth in the United States and around the world at http://www.caymanfinances.com.

Cayman Finance

This entry was posted on Wednesday, June 23rd, 2010 at 6:34 am and is filed under Fiction vs. Fact, Tax Issues, USA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.