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
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
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.