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Cayman Islands

Cayman Islands | Economic Substance – COMMUNICATION

The International Tax Co-operation (Economic Substance) Law (as Revised) (the “Law”) came into force on 1 January 2019 and introduces certain reporting and economic substance requirements for Relevant Entities carrying on Relevant Activities.

  • Relevant Entities that do not carry on a Relevant Activity will continue to submit a simple notification on an annual basis that must be filed at the Registrar of Companies, so that the payment of the annual government fee is accepted.
  • Relevant Entities that carry on Relevant Activities will be required to submit a simple notification on an annual basis (as explained above) and to report information on an annual basis to the Cayman Islands Tax Information Authority (“TIA”) through the Department for International Tax Cooperation (“DITC”) portal.

First Year Deadlines

The DITC has recently clarified the first year deadlines for Economic Substance Return (ESR) filings are as outlined below.

Entities Tax Resident in another Jurisdiction

  1. For entities reporting on a financial year (i.e. period) ending any time between 31 December 2019 and 29 February 2020 (both dates inclusive) which are claiming to be tax resident in another jurisdiction, the deadline is 28 February 2021. For the avoidance of doubt, this deadline applies regardless of which relevant activity is being carried on.
  2. For such entities reporting on a period ending from 1 March 2020 onwards, the deadline is 12 months after the period end date.

Entities that carry on Intellectual Property (IP) Business

  1. For relevant entities which are carrying on IP business and reporting on a period ending any time between 31 December 2019 and 29 February 2020 (both dates inclusive), the deadline is 28 February 2021.
  2. For such entities reporting on a period ending from 1 March 2020 onwards, the deadline is 12 months after the period end date.

Entities that carry on Relevant Activities (except IP Business)

  1. For relevant entities which are carrying on any of the relevant activities, except IP Business, and reporting on a period ending any time between 31 December 2019 and 30 April 2020 (both dates inclusive), the deadline is 30 April 2021.
  2. For such entities reporting on a period ending from 1 May 2020 onwards, the deadline is 12 months after the period end date.

WHAT NEEDS TO BE DONE?

If your entity’s 2019 Economic Substance Notification, filed during 2020, confirmed that the entity carries on a Relevant Activity or is Tax Resident in another jurisdiction, please contact us at marketing@omcgroup.com to provide you with further information on your entity’s Economic Substance Return (ESR) filing.

If the entity’s Responsible Person, i.e. the individual who signed the 2019 Economic Substance Notification, received an email from the DITC portal requesting to activate an account, please contact us at marketing@omcgroup.com to provide you with further information on your entity’s Economic Substance Return (ESR) filing. 

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