The Cayman Islands ("Cayman") has signed a Tax Information Exchange Agreement ("Australian TIEA") with Australia, which will come into effect on 1 July 2010 subject to the implementation of constitutional and legal procedures in both jurisdictions.The Australian TIEA may allow Cayman to obtain for Cayman registered entities, concessional tax rates on withholding from distributions by managed investment trusts, including distributions of capital gains on taxable Australian property. The Australian TIEA will therefore ensure a more favourable tax treatment under Australian law for Cayman companies, trusts and registered partnerships which are invested in Australian managed investment trusts, particularly those which hold Australian real property. Distributions to Cayman entities will be taxed at 7.5% instead of 30%, which is the rate that applies to distributions to residents of jurisdictions which have not signed exchange of information agreements.
The Australian TIEA is the fifteenth TIEA signed by the Cayman government.
Having successfully concluded negotiations with other OECD and G-20 countries, the government anticipates signing further agreements over the coming months.
Please see the attached update for further information.