CRS compliance for Cayman Islands entities: What you need to know

Complying with international tax standards, like the Common Reporting Standard (CRS), is essential for financial entities in the Cayman Islands. Non-compliance can lead to significant penalties, reputational risks, and operational headaches. Whether you’re new to CRS or looking for clarity, this guide will walk you through the key steps, common pitfalls, and how Harneys Fiduciary can help you stay compliant.

CRS is a global tax transparency initiative requiring financial entities to report certain financial account information to local tax authorities. In the Cayman Islands, the Tax Information Authority (DITC) oversees CRS compliance. Staying compliant ensures your entity avoids costly penalties and maintains its good standing.

1. File a CRS return
   • Submit a CRS return for each financial account classified as “Reportable”
   • If no such accounts exist, file a “Nil Return” to confirm compliance
2. Submit a compliance form
   • Every financial entity must file a CRS compliance form by 15 September annually, regardless of activity
3. Meet reporting deadlines
   • CRS returns are due by 31 July of the following year (e.g., returns for 2023 must be filed by 31 July 2024)

• Overlooking CRS registration: Many entities are registered under FATCA but not under CRS, leaving gaps in compliance
• Missing returns: Failing to file CRS returns or nil returns is a common oversight
• Non-submission of compliance forms: Forgetting to file the compliance form can trigger breach notices from the DITC

The consequences of missing CRS obligations can be severe:

• Fines of up to CI$50,000 for entities and CI$20,000 for individuals
• Daily fines imposed for ongoing breaches
• Potential reputational damage and increased scrutiny from authorities

1. Take immediate action:
• Submit any outstanding CRS returns or nil returns via the DITC portal
2. Complete the compliance form:
• Ensure all details are accurate and submitted before the given deadline
3. Review internal policies:
• Assess your policies and procedures to ensure they align with CRS requirements and prevent future issues

Understanding and navigating CRS requirements can be overwhelming, but you don’t have to go at it alone. Our experienced Harneys Fiduciary Regulatory Reporting Team specialises in helping Cayman Islands entities achieve and maintain compliance with CRS and FATCA obligations. Here’s how we can assist:

• Registration and reporting:
• We’ll ensure your entity is correctly registered for CRS and FATCA
• We’ll handle your CRS returns and compliance forms with precision
• Breach notice resolution:
• If you’ve received a breach notice, we’ll guide you through resolving it swiftly and effectively
• Policy and procedure support:
• We’ll help you establish robust compliance policies to prevent future issues

Even if you’ve fallen behind, it’s never too late to get back on track. Our team is here to simplify the complexities of CRS compliance and protect your entity from unnecessary penalties, or enforcement action.

Reach out to your Harneys Fiduciary representative or contact our team directly to discuss your CRS compliance needs. Together, we’ll ensure your entity stays compliant and thrives in today’s regulatory environment.