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
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
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.