By Alex Cooper
On February 2, 2018, the Cayman Islands’ Ministry of Financial Services issued an Industry Advisory on the Islands’ country-by-country (CbC) reporting notification requirements.
CbC reporting is part of a three-tiered approach to transfer pricing documentation (along with “master” and “local” files) developed under base erosion and profit shifting Action 13. The Tax Information Authority (International Tax Compliance) (Country-by-Country Reporting) Regulations 2017, which implements CbC reporting in the Cayman Islands was gazetted on December 15, 2017.
The advisory notes that every entity resident in the Islands must determine whether it is a “constituent entity” of a multinational group (MNE Group) for the purposes of the CbC reporting regulations. A “constituent entity” resident in the Cayman Islands must identify the “reporting entity” of the MNE Group, it states.
According to the advisory, the “reporting entity” is generally the “ultimate parent entity” of an MNE Group but, in certain cases, may instead be a “surrogate parent entity.”
Notification on the CbC reporting portal
The advisory notes that the “reporting entity” of an MNE Group with constituent entities resident in the Cayman Islands must appoint the individuals who will be the primary contact and the secondary contact for those constituent entities. The primary contact must create a single profile on the CbC reporting profile for the MNE Group by completing a two-part notification process.
The notification deadlines with respect to constituent entities of an MNE Group with respect to fiscal year beginning January 1, 2016, are:
- May 15, 2018, if the “reporting entity” is resident in the Cayman Islands, or
- September 30, 2018, if the “reporting entity” is not resident in the Cayman Islands.
The Ministry noted that the Department for International Cooperation is expected to launch the CbC reporting portal in March this year.
The author is editorial assistant, TP News