Cayman Islands reject US tax haven label
GEORGE TOWN, Grand Cayman, Friday January 20, 2012 – Richard Coles, the Chairman of the private-sector organisation Cayman Finance - on Thursday jumped to the territory’s defense following US media reports describing the Caribbean island as a notorious tax haven used by Republican Presidential Candidate, Mitt Romney and his wife.
Romney has invested as much as US$8 million in at least 12 funds listed on a Cayman Islands registry, according to ABC News.
In quick response, Coles said the Cayman Islands laws do not prevent investors from complying with their tax obligations, noting that these individuals are ultimately responsible for paying their taxes in their home country.
“There is nothing in the Cayman Islands laws that interferes with that”, he stressed.
“We do understand that this is election season in the US and typically these types of reports surface as part of that process but it is unfortunate that despite significant evidence to the contrary, journalists would continue to suggest that the laws of the Cayman Islands encourage avoidance of tax.
“In fact, our tax neutral framework has played an important role in enabling ordinary Americans to efficiently invest via their pension funds and many US corporations have been able to maintain their international competitiveness through the use of Cayman Islands structures.”
The organisation chairman explained further that the British Overseas Territory was involved in initiatives that encourage full cooperation with US authorities on tax matters.
These include a bilateral agreement which has been in place since 2006, a mutual legal assistance treaty and the Cayman Islands involvement with, and recognition by, the Organisation for Economic Co-operation and Development Global Forum that focuses on tax information exchange.
Romney’s campaign team, in its response, said the media report was flatly wrong.
“The Romneys' investments in funds established in the Cayman Islands are taxed in the very same way they would be if those funds were established in the United States. These are not tax havens and it is false to say so,” it stated.
The US Tax Justice Network ranks the Cayman Islands second on its list of the world's best tax havens in terms of its secrecy and the bank accounts that are managed in the country.