Time is up! Cayman finally opens FATCA portal and grants extensions
TAX ALERT |
After months of anticipation, the Cayman Islands’ new DITC Portal is finally available for Cayman reporting financial institutions (FIs) to file reports required under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). The portal opened this week after Cayman issued an Industry Advisory on Oct. 30, 2020 announcing its intention to open the portal in November 2020. The advisory also announced that the deadline for filing Cayman FATCA and CRS reports has been extended by 30 days to Dec. 16, 2020 and the deadline for filing Caymans’ new CRS Compliance Form has been extended by three months to March 31, 2021.
With the late launch of Cayman’s portal (which was initially set to go live in June 2020), FIs have a very limited window of time to confirm their reporting obligations, gather all reportable data, set up/register their accounts and designate authorized users. These factors coupled with the inherent instability and challenges that have historically plagued Cayman’s portal when multiple users with large volumes of data access the system likely mean more angst rather than relief for FIs who are already struggling to allocate resources to get the job done. Further, given new data requirements and the condensed timeframe, many FIs are concerned about their ability to file accurate and timely reports.
To address some of these concerns, Cayman has published a new set of Frequently Asked Questions, a new DITC_Portal_User_Guide, and new CRS Guidelines Version 4.0 dated Nov. 6, 2020 that are available as helpful links on the new portal which should make things easier, but users are still a bit uneasy. Notwithstanding this helpful guidance, many in industry are still hopeful that Cayman will grant an additional extension of time to file reports or offer some form of relief from penalties for potentially late filers who make a good faith effort to comply with the rules.
What’s new or different about this portal?
The new DITC portal features a more user-friendly dashboard, tools for generating xml-formatted files, a message board by entity and batch processing of certain reports. It is being rolled out in phases with Phase 1 focusing solely on FATCA and CRS reporting. Future phases are planned which will include filing Economic Substance Reports and Country-by-Country (CbC) reporting in one centralized location. Despite these features, however, FIs accessing the portal should note that:
- Test returns cannot be submitted at this time;
- FI deactivation functionality is not currently available, but should be available in Q1 of 2021;
- The CRS Compliance Form bulk upload feature is not currently available, but Cayman has indicated that it expects that the bulk upload feature (in CSV format) will be added in 2021
What action steps should FIs take now?
In order to ensure timely filing of FATCA and CRS reports, it is important that Cayman FIs take the following steps now:
- Register on the new system - Responsible Officers (ROs) and Principal Points of Contacts (PPOCs) for Cayman Reporting FIs who filed reports in prior years or previously registered on Cayman’s AEOI portal should have received an email from email@example.com with account set-up and activation instructions. Use the links provided to set up user accounts and to designate secondary users (such as service providers) on the account. FIs have two weeks from the date that the email is generated to set up their user accounts.
- Unblock spam folders – To ensure that you do not miss important correspondence from portal administrators, all ROs, PPOCs and secondary users should check junk mail and spam folders and unblock the address firstname.lastname@example.org
- Check message boards – Once you have gained access to the portal, check the FI dashboard for important messages and any action required.
- Review and confirm historical data – FIs should confirm that Cayman has migrated all data from its prior AEOI system portal to the new DITC portal. Service providers and other users with secondary user access on the old system may need to be reauthorized for each entity before they can access the new system.
For assistance with filing FATCA and CRS reports, please refer to our website or contact a member of our FATCA & Global Information Reporting services team in our International Tax Practice.