Declaration on Joining the CARF MCAA

Summary

This document is a Declaration signed by the Cayman Islands' Competent Authority (DITC Director Duncan E. Nicol) confirming that the Cayman Islands has joined the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Information pursuant to the Crypto-Asset Reporting Framework (CARF), effective as a signatory from 26 November 2024. The attached Agreement itself is a government-to-government instrument between tax authorities (Competent Authorities) of participating jurisdictions, made under the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters, and sets out the mechanics for automatically exchanging crypto-asset account and transaction information collected domestically.

The Agreement does not itself impose reporting duties directly on private businesses; rather it obligates the signing Competent Authorities to exchange, on an annual automatic basis, information that domestic CARF implementing legislation requires Reporting Crypto-Asset Service Providers (RCASPs) to collect through due diligence and report to the local tax authority.

• Identity details: Identity details of Reportable Users and Controlling Persons.
• Provider details: Details of the Reporting Crypto-Asset Service Provider.
• Transaction data: Detailed transaction data (acquisitions/disposals against fiat or other crypto-assets, retail payment transactions, and transfers) for each type of Relevant Crypto-Asset.

For Cayman Islands compliance officers, the practical significance is that this Declaration confirms the jurisdiction's participation in the international CARF exchange network, which underpins and gives effect to domestic CARF reporting obligations (found in separate Cayman legislation/regulations) applicable to Reporting Crypto-Asset Service Providers. The Agreement also contains confidentiality/data-safeguard requirements, provisions for suspension or termination of exchange with a non-compliant Competent Authority, and administrative mechanics run through the OECD Co-ordinating Body Secretariat.

Key obligations

• Competent Authorities that are parties to the Agreement must annually exchange, on an automatic basis, the specified Reportable Person and transaction information obtained under their domestic CARF reporting and due diligence rules (Section 2).
• Competent Authorities listed as non-reciprocal jurisdictions will send but not receive the specified information; other jurisdictions will not send information to non-reciprocal jurisdictions (Section 2).
• Competent Authorities must notify the Co-ordinating Body Secretariat under Section 7 (including listing counterpart jurisdictions) before the Agreement becomes 'in effect' between them.
• Information received under the Agreement must be kept confidential and used only for purposes set out in the Convention.
• A Competent Authority may suspend information exchange with another Competent Authority on written notice citing significant non-compliance (e.g., confidentiality/data-safeguard breaches or failure to provide timely/adequate information).
• A Competent Authority may terminate its participation by written notice to the Co-ordinating Body Secretariat, effective (unless stated otherwise) on the first day of the month after a 12-month notice period; previously exchanged information remains confidential.

Applies to

Competent Authorities (tax administrations) of signatory jurisdictions, Reporting Crypto-Asset Service Providers (RCASPs)

Deadlines

• 26 November 2024: Date from which the Competent Authority of the Cayman Islands is considered a signatory to the CARF MCAA.
• annually: Each Competent Authority is to exchange the specified Reportable Person/crypto-asset transaction information with other Competent Authorities on an annual automatic basis (Section 2).
• 12 months after notice of termination: If a Competent Authority terminates participation, termination becomes effective on the first day of the month following expiration of a 12-month period after the termination notice, unless otherwise specified.