McKeeva Bush, the Cayman Islands' Premier, co-signed the TIEA with Song Lan, Deputy Commissioner and Vice Minister of China State Administration of Taxation at a ceremony on September 26.
The agreement will come into effect after the Cayman Islands and the People Republic of China wrap up their individual ratification procedures. China has become another member of the G20 group of countries to have a tax information agreement with the Cayman Islands.
Speaking at the ceremony, Mr. Bush said igning this TIEA is a significant step in enhancing the relationship between the Cayman Islands and China. ?He added, ith China being one of the fastest growing economies in the world, we are confident that this TIEA will contribute positively to economic activity between the two countries."
The signing ceremony was attended by the Governor Duncan Taylor, members of the Legislative Assembly, the Cayman Islands International Tax Cooperation Team members, senior officials from the Ministry of Finance and representatives from the Bank of China.
In the past few years, the Chinese government has been tightening its grip on over-registered companies and wealthy individuals, who use offshore financial centers as tax havens.
Last year, China signed TIEAs with the Isle of Man and Bermuda after securing one with British Virgin Islands in 2009. The agreements pave the way for exchange of tax information covering corporate accounts, owners and shareholders.
The growing number of TIEAs China has signed came a time when the world second largest economy is still booming, making companies eager to expand overseas and rich individuals seek tax havens to grow their wealth.
Under TIEAs, offshore-registered Chinese companies are likely to be deemed as Chinese resident enterprises. Thus, they have the obligation to make tax payments based on the Chinese taxation laws.
With more TIEAs in the pipeline, Chinese officials hope such moves can help significantly curb the country round-tripping investment, dent capital flight and help improve the tax collection process to boost fiscal revenue.
