Tax Information Authority (International Tax Compliance) (Country-by-Country Reporting) Regulations, 2017 (CbCR Regulations)

Summary

These are the Cayman Islands' Country-by-Country Reporting (CbCR) Regulations, 2017, made under the Tax Information Authority Law. They implement the OECD BEPS Action 13 standard by requiring large multinational enterprise (MNE) groups with Cayman-resident constituent entities to notify the Cayman Tax Information Authority (now administered by DITC) of their reporting status and to file an annual Country-by-Country Report containing jurisdiction-by-jurisdiction financial and operational data about the group.

The Regulations apply to any Constituent Entity of an MNE Group that is resident in the Cayman Islands (incorporated/established there, has its place of effective management there, or is subject to financial supervision there), where the MNE Group's total consolidated revenue exceeds US$850 million. Obligations differ depending on whether the Cayman entity is the Ultimate Parent Entity, has been appointed Surrogate Parent Entity, or is neither, in which case it must simply identify the actual Reporting Entity.

• Report content and template: Sets out the required content and standard template for the Country-by-Country Report, covering revenue, profit/loss, tax paid/accrued, capital, earnings, employees, tangible assets, and entity listings by jurisdiction.
• Filing method: Requires filings and notifications to be made through the Authority's electronic portal.
• Record retention: Imposes a six-year record retention requirement.
• Offences and penalties: Creates offences and administrative penalties, including daily default penalties, for non-compliance, tampering, hindering the Authority, or entering into arrangements to avoid obligations under the Regulations.
• Defence and appeal: A reasonable excuse defence is available, and penalty decisions can be appealed.

Key obligations

• Each Ultimate Parent Entity of an MNE Group resident in the Islands must file a Country-by-Country Report conforming to regulation 6 with the Authority by the deadline in regulation 6(3).
• A Surrogate Parent Entity resident in the Islands must file a Country-by-Country Report on behalf of the MNE Group where specified conditions apply (e.g. the Ultimate Parent Entity is not obligated to file in its home jurisdiction, no Qualifying Competent Authority Agreement is in effect, or there has been a Systemic Failure).
• Any Constituent Entity resident in the Islands must notify the Authority whether it is the Ultimate Parent Entity or Surrogate Parent Entity no later than the last day of the Reporting Fiscal Year (with a special deadline of 31 March 2018 for the Fiscal Year beginning in 2016).
• A Constituent Entity resident in the Islands that is neither the Ultimate Parent Entity nor Surrogate Parent Entity must notify the Authority of the identity and tax residence of the actual Reporting Entity, by the same deadlines.
• The Country-by-Country Report must be filed no later than twelve months after the last day of the Reporting Fiscal Year, except that the Report for the Reporting Fiscal Year beginning on or before 31 March 2016 must be filed no later than 31 March 2018.
• The Country-by-Country Report must be filed in the exact standard template format set out in the Schedule to the Regulations.
• Notifications and filings must be made using the Authority's electronic portal or such other method as the Authority prescribes.
• Constituent Entities must retain, for six years, any books, documents, electronically stored information or other records relating to information reportable under the Regulations.
• A Constituent Entity must comply with any Authority notice requiring it to provide or make available information or records to verify accuracy of reported information, within the time specified by the Authority.
• Persons must not enter into arrangements with a main purpose of avoiding an obligation under the Regulations, as such arrangements will be disregarded.

Applies to

Constituent Entities of MNE Groups resident in the Cayman Islands, Ultimate Parent Entities, Surrogate Parent Entities, MNE Groups with total consolidated group revenue of US$850 million or more

Deadlines

• 31 March, 2018: Deadline for a Constituent Entity resident in the Islands to notify the Authority of its status as Ultimate Parent Entity or Surrogate Parent Entity, for the Reporting Fiscal Year of the MNE Group that began during 2016.
• 31 March, 2018: Deadline for a Constituent Entity that is neither the Ultimate Parent Entity nor the Surrogate Parent Entity to notify the Authority of the identity and tax residence of the Reporting Entity, for the Reporting Fiscal Year that began during 2016.
• no later than the last day of the Reporting Fiscal Year of the MNE Group: Recurring deadline for Constituent Entities resident in the Islands to notify the Authority of their status as Ultimate/Surrogate Parent Entity or the identity of the Reporting Entity.
• twelve months after the last day of the Reporting Fiscal Year of the MNE Group: Recurring deadline for filing the Country-by-Country Report with the Authority.
• 31 March 2018: Deadline for filing the Country-by-Country Report with respect to the Reporting Fiscal Year that began on or before 31 March 2016.
• Reporting Fiscal Years beginning on or after 1 January 2016: The Regulations are effective for MNE Groups' Reporting Fiscal Years from this date, though they entered into force in the Islands on the date of publication (15 December 2017).