Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
U.S., Cayman Islands Reach Tax Deal
Author: Scarinci Hollenbeck, LLC
Date: August 28, 2013
Key Contacts
Back
Falling in line with the push for greater global collaboration to combat tax evasion, the United States and the Cayman Islands have reached a tax deal to fight violations.
The partnership – which is partially designed to encourage other low-tax and favorable tax havens to join the U.S’s anti-tax evasion legislation – means that the highly-scrutinized Cayman Islands will participate in the Foreign Account Tax Compliance Act set to take effect in July 2014. More specifically, the agreement “will provide certainty to Cayman’s significant fund industry with respect to FATCA implementation,” said Robert Stack, the U.S. Treasury Department’s deputy assistant secretary for international tax affairs, according to Reuters.
The deal is a large win for the U.S.’s battle against tax evasion, as the small Caribbean destination currently has no income tax and is therefore a popular location for individuals with large investment holdings. Once the agreement between the U.S. and the Cayman Islands is signed, the latter will be required to disclose account information on all U.S. clients who hold more than $50,000 in assets in the small island. However, these thresholds may be higher for those who are married and filing jointly, the IRS noted. Failure to comply with the new tax law could result in a 30 percent withholding tax on U.S. source income, and may result in countries essentially being pushed out of U.S. markets.
The threat of these penalties may play a role in encouraging other small islands and countries who have not yet signed agreements with the U.S. to either do so, or risk being alienated from lucrative U.S. financial markets. For example, Bermuda and the British Virgin Islands have yet to forge an agreement with the U.S., and may face difficulties competing for investment funds with other countries that have entered into an international partnership, Reuters explained.
- Practices: Tax and Trusts & Estates, International Law & Trade, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
Author: Paul Grossman
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.