Upcoming FATCA Deadlines for Cayman-Based Funds

Most offshore investment funds organized under the laws of the Cayman Islands will need to register on the IRS FATCA Registration System to apply for a Global Intermediary Identification Number (“GIIN”) no later than December 22, 2014 in order (i) to ensure inclusion on the IRS published list and avoid the imposition of the 30% withholding tax on their U.S. source dividend and interest income beginning January 1, 2015 and (ii) to comply with Cayman Islands law.

In addition, Cayman Islands funds qualifying as “Reporting FIs” (most offshore investment funds qualify as such) are required to register with the Cayman Islands Tax Information Authority (the "TIA") no later than March 31, 2015 in order to allow them to comply with Cayman reporting obligations and meet the current reporting deadline of May 31, 2015. Registration with the TIA will take place on a new online portal which is expected to be opened in early 2015.

Reporting FIs need to conduct due diligence on their account holders to establish which accounts are “U.S. Reportable Accounts” under the Cayman Islands regulations and to determine the correct date reporting commences in respect of such U.S. Reportable Accounts. Even if a fund does not have any U.S. Reportable Accounts, a Reporting FI still needs to register with the TIA in order to file a 'nil report' by May 31, 2015.

U.S. Treasury Circular 230 Notice: U.S. Treasury Regulations require us to inform you that any U.S. tax advice in this communication cannot be used by you (i) to avoid tax penalties or (ii) to promote, market or recommend to another party any transaction or matter addressed herein.

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12.01.2014  |  PUBLICATION: GlobalNote  |  TOPICS: Investment Management, Tax  |  INDUSTRIES: Private Investment Funds

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