On 12 November 2020 the Cayman Islands’ Department for International Tax Co-operation (DITC) issued an industry advisory update relating to Economic Substance (ES) matters. We have outlined a summary of the update which includes the release of sample ES return forms, extension of upcoming ES reporting deadlines and sector specific ES guidance.
The DITC has provided links to the following sample ES Returns:
The information required by the Sample Forms will be submitted via the DITC Portal once it is open. Users of these ES Return Forms may refer to these notes, which explain the purpose of the Returns and Form, and provide a high-level overview of the required data points.
Reporting deadlines for submitting the ES Return Forms have been extended, only for this first year. The deadlines are:
These extended deadlines only apply to businesses with a financial year ending on 31 December 2019. Going forward, the reporting will be required within 12 months of the end of the applicable financial year.
It is imperative that any entity that is required to submit an ES Return Form do so before their applicable deadline. The ES legislation imposes a late filing penalty of USD 6,098 and an additional penalty of USD 610 for each day during which the failure to file continues.
On 13 July 2020 the DITC issued version 3.0 of the Guidance Notes relating to the ES Law. The Guidance Notes address certain important aspects of the ES Law’s economic substance requirements, their practical implementation and include sector specific guidance for each relevant activity.
Our team of professionals in the Cayman Islands has been working closely with our clients since the implementation of the ES Law in January 2019. We can help you navigate through the ES Law and related Guidance Notes, and offer bespoke solutions should you need to comply with the ES Law including:
Please contact us for assistance.