The Cayman Islands, a British Overseas Territory in the Caribbean, has implemented Country-by-Country (CbC) Reporting through the Tax Information Authority (International Tax Co-operation) (Country-by-Country Reporting) Regulations, 2017.

MNEs with a consolidated group revenue of at least USD 850 million in the previous fiscal year are required to file a CbC report. The report should be in XML format and should contain information on the global allocation of income, taxes paid, and other indicators of economic activity among tax jurisdictions in which the MNE group operates.

The ultimate parent entity of the MNE group is responsible for filing the CbC report if it is resident in the Cayman Islands. If the ultimate parent entity is not resident in the Cayman Islands, the obligation to file the CbC report falls on the surrogate parent entity, if any, that is resident in the Cayman Islands.

The deadline for filing the CbC report in the Cayman Islands is within 12 months from the end of the fiscal year of the MNE group. For example, if the fiscal year of the MNE group ends on December 31, the CbC report must be filed by December 31 of the following year. Failure to file the CbC report or providing false or misleading information can result in penalties.

The Cayman Islands requires MNEs to file the CbC report electronically through the Tax Information Authority’s online portal. The portal allows MNEs to upload their CbC report in XML format, and the Tax Information Authority will send a confirmation of receipt once the report has been successfully submitted.

In addition to the CbC report, the Cayman Islands requires MNEs to appoint a local representative who will act as the point of contact between the MNE and the Tax Information Authority. The local representative must be a resident of the Cayman Islands and must have the necessary knowledge and expertise to communicate with the Tax Information Authority on behalf of the MNE.

The Cayman Islands has also introduced economic substance requirements for entities that carry out certain activities in the jurisdiction. The economic substance requirements apply to entities engaged in banking, insurance, fund management, financing, leasing, headquarters, shipping, and intellectual property.

In summary, the Cayman Islands follows the guidelines set out by the OECD for CbC Reporting. MNEs meeting the threshold of consolidated group revenue must file a CbC report in XML format through the Tax Information Authority’s online portal within 12 months from the end of the fiscal year of the MNE group. Failure to comply with the CbC Reporting requirements can result in penalties. MNEs must also appoint a local representative to act as the point of contact between the MNE and the Tax Information Authority.