On 30 June 2021, the Cayman Islands Government published the International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2021. The main change to the regulations is the addition of partnerships to the definition of a 'relevant entity'. The categories of relevant activities and exempted activities remain unchanged.
Partnerships formed on and after 30 June 2021 are required to satisfy the economic substance test from the date on which they commence a relevant activity. Partnerships formed prior to 30 June 2021 are required to satisfy the economic substance test from 1 January 2022. All partnerships, irrespective of formation date, will be required to notify the Tax Information Authority (TIA) on or before January in each year of their operations in the jurisdiction during the prior year.
If the partnership engages in activity that is relevant for economic substance, it also will be required to file an economic substance return. For example, investment funds, domestic companies, and local partnerships do not conduct relevant economic substance activities, they must notify with the TIA but they are not required to file an economic substance return. For further information on the regulations please see here.
How can Bell Rock help?
As a Cayman Islands based professional services firm, we have been providing a range of services to our international client base including economic substance solutions. Each entity is treated on a case by case basis but we are able to advise on the requirements, provide experienced directors and managers on the board, assist with hiring employees, physical offices space, compliance and regulatory services, accounting and book keeping, attend to annual economic substance filings and other support services that may be required. For further information, please feel free to contact us: firstname.lastname@example.org