NEW YORK, United States, Thursday April 19, 2018 – When it comes to accounting and tax compliance, two British Overseas Territories in the Caribbean are considered the least complex jurisdictions to do business.
For the second year in a row, the Cayman Islands earned the title of least complex location out of 94 countries in the TMF Group’s Annual Financial Complexity Index (FCI), which weighs economic, legal, tax and accounting policies to determine the most and least complex regions for businesses. It was followed by the British Virgin Islands, while Guyana was the seventh least complex.
“Between the OECD’s push for transparency with the new BEPS [Base Erosion and Profit Shifting] actions, the introduction of the CRS [Common Reporting Standard] and the ongoing requirements of the Foreign Account Tax Compliance Act (FATCA), there has been a lot of changes in financial regulation. It’s interesting to discover, then, that two of the most well-known offshore jurisdictions remain among the least complex in the world in which to do business,” the FCI report noted.
“While there is an increase in reporting needed, our experts say that from an accounting and tax perspective, the overall increase in burden for companies is relatively small. However, directors and administrative providers will need additional access to relevant information to ensure proper and timely reporting.”
The FCI report ranks each country based on overall financial complexity, with the overarching parameters exploring four distinct service areas: compliance (cross-border transactions, data governance), tax (registration, compliance and type), reporting (processes, legal regulations) and bookkeeping (accounting, government policy and technology.)
In compliance, the Cayman Islands and Afghanistan were the least complex, with a 22 per cent score in the survey.
In the tax category – which assesses responses that measure the level of complexity associated with adhering to local tax policies, in each region – the Cayman Islands was again the least complex, with a score of zero per cent.
Cayman Islands also held the lowest position, with a score of 16 per cent, in the bookkeeping complexity list.