The Cayman Islands has gazetted the Confidential Information Disclosure Law 2016, thereby repealing the Confidential Relationships (Preservation) Law with immediate effect as of June 2016. The old law was seldom used but was often cited as evidence of Cayman's secrecy. The new law returns liability for breach of confidence to the common law and rules of equity, as in the UK.
Cayman’s often misinterpreted Confidential Relationships (Preservation) Law, commonly referred to as the Secrecy Law, has been repealed and replaced with the Confidential Information Disclosure Law.
Financial Services Minister Wayne Panton, who tabled the bill in the Legislative Assembly on Friday (24 June), pointed out that the government has the “complete support of industry” on the repeal of the Confidential Relationships (Preservation) Law and its replacement with the Confidential Information Disclosure Law.
Premier Hon Alden McLaughlin, in May, announced that as part of Cayman’s commitment to tax transparency it would repeal the Confidential Relationships (Preservation) Law.
His statement followed Cayman’s commitment to join the UK-led initiative to develop a new global standard for the automatic sharing of beneficial ownership information.
The Premier also said that in September the new Data Protection Law will be introduced “acknowledging privacy as a basic human right.”
The new data protection legislation, he said, is one that is “on par with what is in place in the European Union.”
Mr Panton, speaking to the new Confidential Information Disclosure Law on Friday, explained that it will further clarify “the local competent authorities to whom information can be disclosed and in what circumstances” and removes the current criminal sanction for breach of disclosure of confidential information while maintaining the common law civil liability.
The new law, he assured, will continue to protect confidential information and “will enhance the profile and record of transparency of the Cayman Islands by clarifying one of the core objectives” of the Confidential Relationships (Preservation) Law.
Under the law disclosures by persons who owes a duty of confidentiality, for example corporate service providers, in cases of compliance with court orders, compliance with an order made by the Cayman Authority pursuant to the Mutual Legal Assistance (United States of America) Law (2015 Revision) order or search warrant made by the Central Authority pursuant to the Criminal Justice (International Cooperation) Law (2015 Revision) “shall not constitute a breach of the duty of confidence and shall not be actionable at the suit of any person.”
The law also sets out how the court shall treat with the giving of evidence of confidential information, including documents, in court proceedings and by order.
Panama has informed the Organization for Economic Co-operation and Development (OECD) of its intention to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. It is considered by the OECD to be the most comprehensive multilateral instrument available amongst jurisdictions for all forms of tax cooperation to tackle tax evasion and avoidance, including the exchange of information on a government-to-government basis.
The Multilateral Convention on Mutual Administrative Assistance in Tax Matters was jointly developed by the OECD and the Council of Europe in 1988 and amended by Protocol in 2010.
Since 2009, the G20 has consistently encouraged countries to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. More than 90 countries (including the U.S.) currently participate. The complete list of participating countries may be found here.
Panama intends to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Panamanian Ministry of Foreign Affairs announce Panama's intention to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters on its website. The OECD also issued a press release indicating as such.
Panama's participation in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters would not require the automatic exchange of information, clarifies the Panamanian Ministry of Foreign Affairs. Instead, it would extend Panama's network to the almost 100 countries who have already signed the agreement. Whether or not Panama automatically exchanges information with any of these countries is in Panama's discretion.
In the name of tax transparency, the country recently committed to implementing the OECD Common Reporting Standard, shortly after the leak of the so-called controversial “Panama Papers” see our post The Saga of the "Panama Papers" Has Only Just Begun!.
The Inland Revenue Authority of Singapore has issued an e-Tax Guide on the territory's general anti-avoidance rule in Section 33 of the Income Tax Act.
The guide, issued on July 11, 2016, explains the three tests to determine whether the GAAR should apply.
It includes examples on actionable avoidance arrangements, namely: the circular flow or round-tripping of funds; the creation of more than one entity for the sole purpose of obtaining a tax advantage; changes to the form of business entity for the sole purpose of obtaining a tax advantage; and the attribution of income that is not aligned with economic reality.
The IRAS clarified that the guidelines and accompanying examples in the guide are not meant to be exhaustive and that arrangements not described in the guide should not be taken as falling outside the ambit of Section 33 of the ITA, or as acceptable to the tax authority.
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