Luxembourg and Cayman Islands release guidance on FATCA and CRS
March 2020
Overview
The tax authorities in Luxembourg and the Cayman Islands recently released summaries of planned future guidance regarding certain provisions of their Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) laws. The guidance indicates that jurisdictions have begun to adopt the next level of requirements, which are similar to the Compliance Program found in the US FATCA foreign financial institution (FFI) agreement.
The takeaway
The recent guidance indicates that jurisdictions have begun to adopt the next level of requirements, which are similar to the Compliance Program found in the US FATCA FFI agreement. We expect this trend eventually will require the ‘responsible officer’ of an impacted financial institution to certify not only how an entity is complying, but also what controls are in place to monitor such compliance (as well as the effectiveness of such controls). These certifications may be challenging for the asset management industry where many aspects of FATCA and CRS compliance are outsourced to one or multiple service providers.
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