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Cayman: Tax dodgers beware

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By: Reshma Ragoonath
Monday, January 04, 2016


Financial Services Minister Hon Wayne Panton says Cayman National’s US $6million settlement following a US tax evasion probe should serve as a lesson that tax evasion will not be allowed to flourish here.

This as Mr Panton advised tax dodgers to get their affairs in order because they will not be able to escape scrutiny of their tax authorities especially with the regulations in Cayman.

Cayman National has agreed to pay a US $6M settlement following a tax evasion probe by the US Department of Justice (DOJ.)
Cayman National has agreed to pay a US $6M settlement following a tax evasion probe by the US Department of Justice (DOJ.)
“Certainly in terms of the regulatory requirements in Cayman today and the filings that occur with international tax authorities, in particular the US, persons who are subject to US tax should ensure that they regularize their position because they will end up being reported,” the Minister said as he commented on the Cayman National tax probe.

Minister Panton made the comment during an interview with The Cayman Reporter on Monday (28 December) at the Progressives Family Fun Day held in Frank Sound.

Last week Cayman National, in its Fourth Quarter report (ending 30 September) posted on its website, revealed that its subsidiaries Cayman National Trust Co. Ltd. and Cayman National Securities Ltd. have been under investigation by the US Department of Justice (DOJ) with respect to potential violations of US criminal laws relating to the evasion of tax by US taxpayers.

Cayman National has agreed to pay a US $6M settlement following the US tax evasion probe.

Cayman National stated in its report that the probe “focuses on mainly past wrong doing by Cayman National Securities Ltd. and Cayman National Trust Co. Ltd.” The financial institution hastened to add, “No issues, and no wrongdoing, have been alleged with respect to CNB (Cayman National Bank Ltd.), or the parent company, Cayman National Corporation Ltd.”

The Cayman Islands Monetary Authority (CIMA) said it does not expect any negative impact on the solvency of Cayman National Bank Ltd from the settlement.

Minister Panton, commenting on the settlement said, “It is an unfortunate situation, but it reflects a legacy position of clients of a bank that have been around for a long time.”

He said while he was aware of the probe he was not privy to the details of the investigation.

However Minister Panton said he was pleased with the outcome.

“I am happy that Cayman National Corporation has been involved in resolving whatever the issue was with the US authorities and the resolution included the continued operation of all of the subsidiaries of Cayman National Corporation so that is a positive thing for the jurisdiction and certainly those people who are employed there,” he said.

Financial Services Minister Hon Wayne Panton says the Cayman National settlement demonstrates that tax dodging will not be allowed to flourish in Cayman.
Financial Services Minister Hon Wayne Panton says the Cayman National settlement demonstrates that tax dodging will not be allowed to flourish in Cayman.
The minister said he is not aware of any similar investigations that are ongoing in Cayman.

However he explained that individuals are well advised to regularize their financial affairs especially in light of the various regulations in Cayman and the international conventions on tax sharing about to kick in.

Soon filing of tax information is going to be made automatically by the financial institutions in Cayman with the Department for International Tax Appropriation in the ministry.

“The information/data contained in those filings is uploaded periodically to the IRS (Internal Revenue Service) so at some point that information is going to be available to the IRS and if the individuals, to whom the information relates or belongs, have not appropriately regularized their position then it may cause a problem for them,” he said.

Minister Panton hastened to add that the business in Cayman today is primarily institutional based and it is not high net worth or private individual wealth.

Thus, he said, he does not think the Cayman National settlement will have a significant impact on the reputation of the jurisdiction.

“I think certainly there has been a satisfactory resolution and that is the end of that,” the minister said.


Source:

http://www.caymanreporter.com/2016/01/04/panton-tax-dodgers-beware/