Agreement For The Exchange Of Information Relating To Taxes And The Tax Information Authority Law, 2005


On 27 November 2001 an Agreement between the Government of

the United States of America and the Government of the United

Kingdom and Northern Ireland, including the Government of the

Cayman Islands was signed to facilitate the exchange of

information relating to taxes (the

"Agreement"). The Agreement confirms

with the commitment made by the Cayman Islands to the

Organisation for Economic Co-operation and Development (OECD)

in May 2000. The Cayman Islands is one of six jurisdictions

which made advance commitments to the OECD and did not appear

on the organisation's list of tax havens published in June


On 15 March 2005, the Cayman Islands' legislature

enacted The Tax Information Authority Law, 2005

("the Law") to give effect to the

Agreement, and the Agreement appears as Schedule 1 to the



Section 3(1) of the Law states that the Law shall apply for

the purpose of giving effect to the terms of the Agreement for

the provision of information in taxation matters including for

the purposes of any proceedings taken by the parties to the

Agreements or by any persons acting on their behalf, connected

with, arising from, related to or resulting from taxation


The Agreement provides for assistance through the exchange

of information relating to the administration and enforcement

of federal income tax laws including information that may be

relevant to the determination, assessment, verification,

enforcement or collection of tax claims with respect to persons

subject to such taxes, or to the investigation or prosecution

of criminal tax evasion in relation to such persons. Criminal

tax evasion under the Agreement requires a wilful and dishonest

intent to defraud the public revenue, evading or attempting to

evade any tax liability where an affirmative act constituting

an evasion or attempted evasion has occurred. The tax liability

must be of a significant or substantial amount, either as an

absolute amount or in relation to an annual tax liability, and

the conduct involved must constitute a systematic effort or

pattern of activity designed or tending to conceal pertinent

facts from or provide inaccurate facts to the tax authorities

of either party.

Information may be provided in accordance with this

Agreement whether or not the person to which the information

relates is a resident or national of the jurisdiction answering

such request, provided that the information is within the

territory or in the possession or control of a person subject

to the jurisdiction of the party accepting such request.


Specific request

Information may only be provided pursuant to specific

request made in accordance with the Agreement. Request for the

information may be made by and to the "competent

authority" which in the case of United States of America

is the Secretary of the Treasury or his delegate and for the

Cayman Islands is the Cayman Tax Co-operation Authority or a

person or authority designated by it.

Competent Authority

Section 4 of the Law designates the Financial Secretary as

the Tax information Authority for the purposes of the Law and

the scheduled Agreement.

The Financial Secretary has power to do all things necessary

or convenient to be done in connection with the performance of

its functions under the Law or Agreement. In particular, the

principal functions of the Financial Secretary are:

1. executing requests, including providing assistance in

relation to taking the testimony or statement of any person;

providing information and articles of evidence; serving

documents and executing searches and seizures;

2. ensuring compliance with the Agreement;

3. advising the Governor on matters relating to any

proposal or agreement for the provision of information in tax

matters or any matter relating thereto;

4. making determinations pursuant to the term of any

Agreement as to any costs and the...

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