Overall CaymanIslands received a score of 77, putting it among all of the places studied in the report.
CaymanIslands Score Breakdown
The Cayman Islands has been assessed on various secrecy indicators, which determine the level of financial transparency in the jurisdiction.
1. Banking secrecy: Cayman Islands does not adequately curtail banking secrecy, indicating a failure in this area. This means that information regarding banking transactions is not easily accessible or shared with relevant authorities.
2. Trust and Foundations Register: Cayman Islands does not put details of trusts on public record. This indicates a lack of transparency in the ownership and operations of trusts and foundations.
3. Recorded Company Ownership: Cayman Islands does not maintain company ownership details in official records, which is another failure in terms of transparency. This lack of information makes it difficult to identify the beneficial owners of companies operating in the jurisdiction.
4. Public Company Ownership: Cayman Islands does not require that ownership details of companies be put on public record. This further contributes to the lack of transparency in the ownership structure of companies.
5. Public Company Accounts: Cayman Islands does not require that company accounts be available on public record. This hinders access to important financial information and restricts public scrutiny.
6. Country-by-Country Reporting: Cayman Islands does not require companies to comply with country-by-country financial reporting. This lack of reporting standards hinders efforts to track and monitor multinational companies’ financial activities.
7. Fit for Information Exchange: Cayman Islands does not require resident paying agents to report information on payments to non-residents to the domestic tax authorities. This decreases the effectiveness of information exchange and hinders efforts to combat tax evasion.
8. Efficiency of Tax Administration: Cayman Islands does not effectively use taxpayer identifiers for analyzing information, nor does it have a large taxpayer unit. This indicates a lack of efficiency in tax administration, potentially impacting the ability to identify and track potential tax evasion.
9. Avoids Promoting Tax Evasion: Cayman Islands does not avoid promoting tax evasion through a tax credit system. This suggests that the jurisdiction may not have robust measures in place to prevent tax evasion practices.
10. Harmful Legal Vehicles: Cayman Islands allows harmful legal vehicles such as cell companies and trusts with flee clauses. These legal structures may facilitate illicit financial activities and undermine efforts to promote transparency.
11. Anti-Money Laundering: Cayman Islands partly complies with international anti-money laundering standards. While efforts have been made, there may still be gaps in the jurisdiction’s implementation and enforcement of anti-money laundering regulations.
12. Automatic Information Exchange: Cayman Islands fully participates in automatic information exchange such as the European Savings Tax Directive, indicating a positive step toward transparency.
13. Bilateral Treaties: Cayman Islands has few tax information sharing agreements complying with basic OECD requirements, indicating a limited level of cooperation in international tax transparency.
14. International Transparency Commitments: Cayman Islands has partly ratified relevant international treaties relating to financial transparency. While some commitments have been made, there may still be room for improvement.
15. International Judicial Cooperation: Cayman Islands partly cooperates with other states on money laundering and other criminal issues. Although some cooperation exists, there may be limitations in the extent of collaboration.
Overall, the Cayman Islands demonstrates mixed results in terms of financial transparency indicators. While some areas indicate a commitment to transparency, others highlight significant deficiencies that contribute to the jurisdiction’s reputation as a secrecy haven.
About Taxation and Finance Transparency
Financial transparency refers to the clarity and openness with which financial institutions, including countries, reveal information related to their financial activities. It encompasses aspects such as public access to information about banking secrecy, company ownership, public company accounts, and other related financial dealings. The significance of financial transparency lies in its potential to curb illicit financial activities, including tax evasion, money laundering, and other corrupt practices. Without transparency, these opaque financial environments can inadvertently or intentionally support the concealment of funds, leading to lost revenues for governments and skewing economic fairness. The assessment of financial transparency is typically based on a set of Key Financial Secrecy Indicators. These indicators serve as benchmarks to evaluate how well a jurisdiction adheres to international transparency standards, shedding light on areas of strength and pointing out facets that need improvement.