Continuing its ongoing commitment to the development and maintenance of the very highest standards of economic and financial propriety, new legislation has been published by the Cayman Islands Government that embraces a global initiative to combat base erosion and profit shifting (BEPS).

The legislation includes the International Tax-Co-operation (Economic Substance) Law, 2018. The Law provides a broad framework for determining the extent to which it will be necessary for a relevant company conducting relevant business to be able to demonstrate appropriate 'substance' in the Cayman Islands.

We do not consider that structures seeking to exploit BEPS are at all prevalent in Cayman, where tax neutrality and the absence of a network of double-taxation treaties would render such structures largely meaningless, but Cayman is committed as a jurisdiction to assisting the international community in the preservation of standards of fiscal propriety wherever possible.

Walkers has been actively involved from the outset in the development of the legislation and we will continue to work with government and our colleagues in the financial services community to ensure that the rules are clear in their meaning and proportionate in their effect.

Guidance Notes are expected to be released shortly, which will contain the detail necessary for us to properly advise you of the likely impact of the new legislation on your business. We will provide further communications and guidance at that time.

In the interim, please do reach out to your usual Walkers attorney or any of the contacts below to discuss the specific implications of the new Law for your business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.