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Cayman Islands Tax Information Authority Issues Hefty Fines for False Statements
Georgetown, Cayman Islands - In a move aimed at cracking down on financial institutions’ (FIs) attempts to circumvent tax regulations, the Cayman Islands Tax Information Authority has announced a slew of fines for false statements made by FIs and their officers.
Fines Imposed for False Statements
According to sources, the Authority has slapped several FIs with penalties ranging from $20,000 to $25,000 for providing information that was “materially inaccurate” or failing to comply with tax regulations. The fines were imposed under Regulations 22(1)(a) and (b), which relate to entities and individuals making false statements.
Case Examples
- One FI was fined $20,000 after it allegedly provided a self-certification that was not made outside the Islands. Despite this being a material breach of regulations, the Authority deemed the fine sufficient punishment.
- In another case, an individual was fined $8,000 for providing information that was “materially inaccurate”. The Authority claimed that the individual had failed to exercise reasonable diligence in preventing the contravention.
Efforts to Ensure Compliance
The fines are part of a broader effort by the Tax Information Authority to ensure compliance with tax regulations and prevent financial institutions from engaging in illicit activities. The Authority has also warned that it will impose penalties on FIs and their officers who fail to comply with regulations, including those related to confidentiality and record-keeping.
Authority Statement
“We take these breaches very seriously and will continue to impose penalties on those who fail to comply with our regulations. Our goal is to ensure that financial institutions operate transparently and in accordance with the law.” - Tax Information Authority
Penalties for Non-Compliance
- Reg. 22(1)(a): Entities and certain individuals - $20,000 to $25,000
- Reg. 22(1)(b): Individuals - $8,000 to $10,000
Imputed Liability System
The Tax Information Authority has also implemented a system of imputed liability, under which directors and officers of FIs can be held accountable for breaches committed by their institutions.
Warning on Attempts to Circumvent Regulations
The Authority has warned that it will not tolerate attempts to circumvent regulations and will impose penalties on those who attempt to do so.