Cayman 27 – ARCHIVE
Business News Politics

Dutch blacklists Cayman, Travers: It’s no surprise

Cayman has been blacklisted by the Dutch Government in its low tax jurisdictions list.
The list was released earlier this week and flags countries blacklisted by the European Union.
Cayman is one of 16 countries flagged by the Netherlands for what it calls low- tax.

Those countries are; Anguilla, the Bahamas, Bahrain, Belize, Bermuda, the British Virgin Islands, Guernsey, the Isle of Man, Jersey, the Cayman Islands, Kuwait, Qatar, Saudi Arabia, the Turks and Caicos Islands, Vanuatu and the United Arab Emirates. These jurisdictions either have no corporation tax or have a corporation tax rate that is lower than 9%.

The Dutch government says the list is used in relation to measures to combat tax avoidance. The first is the additional measure on Controlled Foreign Companies (CFCs) announced on Budget Day, which will come into effect on 1 January 2019.

“With this measure, the government aims to prevent companies from avoiding tax by moving mobile assets to low-tax jurisdictions. The list will also be used to implement a conditional withholding tax on interest and royalties from 1 January 2021. This means that companies registered in the jurisdictions on the Dutch list will pay 20.5% tax from 2021 on interest and royalties received from the Netherlands. This will prevent funds being channeled to tax havens through the Netherlands,” the Dutch Government statement read.

Thirdly, the government said, the Tax and Customs Administration will no longer issue rulings on transactions with companies headquartered in jurisdictions on the list.

Former chairman of the Cayman Islands Stock Exchange Anthony Travers has rejected the list, but he also said it should not come as a surprise.
Mr. Travers wrote on his website that, “Clearly the policy of appeasement adopted by the Cayman Islands government (no doubt in good faith) is rendered somewhat more difficult when dealing with a multi-headed hydra comprising. It seems now, the European Union, the OECD and each independent EU jurisdiction,” he said.
We reached out to the government for comment on the list. We were told a statement is forthcoming.
We also reached out to cayman finance as well for a comment.

They sent the following statement said, “The Ministry of Financial Services is taking the lead with regard to the Cayman Islands response to this development. Cayman Finance continues to monitor the situation and the impact on our financial services industry, we will continue to support the government as we protect, promote, develop, and grow this important pillar of the Cayman Islands economy.”

About the author

Reshma Ragoonath

Reshma Ragoonath

Reshma Ragoonath is a Trinidadian journalist with 18 years media experience with a strong background in print with her most recent stint at The Cayman Reporter. She has a BA in Mass Communications, as well as, an Associate degree in Journalism and Public Relations.

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