Cayman Islands Economic Substance - Reporting IMPORTANT UPDATES

Dear Client,

Previously, we have informed you about the need for all Cayman entities to submit their Economic Substance Notification (ESN) to the Tax Information Authority (TIA). For those entities which fall within the scope of Economic Substance (ES) Law, they have an additional obligation to submit their Economic Substance Report (ESR). Recently, the Department for International Tax Cooperation (DITC) announced a series of key updates regarding Economic Substance reporting, which are summarized below.

-CONTINUATION-

DEADLINE FOR ECONOMIC SUBSTANCE REPORTING (ESR) NOW EXTENDED

If you hold a ‘Relevant Entity’ carrying on IP businesses, your ES reporting deadline is now by or before 31 January 2021 instead of 31 December 2020.

If you hold a ‘Relevant Entity’ carrying on any other kind of ‘Relevant Activity’ or need to declare your entity as a Tax Resident in Another Jurisdiction, your ES reporting deadline is now 28 February 2021 unless your reporting deadline falls after 28 February 2021, in which case your reporting deadline will still be 12 months after the end of your entity’s financial year. Please note that this deadline extension only applies to the first reporting year.

SAMPLE FORMS FOR ECONOMIC SUBSTANCE REPORTING (ESR) NOW PUBLISHED

To better assist companies with ES reporting, the DITC has published samples of ES Returns and relevant Forms. You may access them below (as applicable to your entity):

- If you are a ‘Relevant Entity’ carrying on the business of a pure equity holding company, click here for a sample of the ES Return Form.

- If you are a ‘Relevant Entity’ carrying on high-risk IP business, click here for a sample of the ES Return Form. - If you are a ‘Relevant Entity’ carrying on any other category of ‘Relevant Activity’, click here for a sample of the ES Return Form.

- If you an entity carrying on any category of ‘Relevant Activity’ and claims to be a tax resident in a non-Cayman Islands jurisdiction with regards to said ‘Relevant Activity’, click here for as sample of the ES Return Form.

For an overview of all the documents you must submit for ESR, please click here.

The DITC Portal will be rolling out its ES reporting functionalities in the coming weeks. We will inform you once we receive updates from the Cayman authorities.

Sincerely,

V.I Services & Solutions Limited