Trinidad And Tobago 'Substantially' FATCA Compliant
by Mike Godfrey, Lowtax.net, Washington
15 December, 2014
Trinidad and Tobago has confirmed that it now has an agreement "in substance" with the United States concerning its Foreign Account Tax Compliance Act.
FATCA was enacted by the US Congress in 2010 and took effect on July 1, 2014. It is intended to ensure that the US Internal Revenue Service (IRS) obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information about their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
The Intergovernmental Agreements (IGAs) being concluded by the US and other territories allow information to be transmitted by FFIs to a central authority in the home state, which then can transmit that data to the Internal Revenue Service in the US. Under IRS transitional guidance, territories may be considered FATCA compliant if they demonstrate firm resolve to sign an IGA as soon as possible, as is the case, now, with Trinidad and Tobago.
From December 31, 2014, the US Treasury Department intends to again review the list of jurisdictions with whom it has agreements 'in substance' on a monthly basis, to assess whether it continues to be appropriate to treat these jurisdictions as though they have an IGA in effect, or whether a jurisdiction should be removed from the list. Removal from the list requires FFIs to communicate directly with the IRS.
Trinidad and Tobago's Minister of Finance and the Economy, Larry Howai, said: "FATCA compliance is critical for the continued interaction of our banks and other financial institutions with their counterparts in the US. As you know, Trinidad and Tobago conducts a tremendous amount of trading and investing with the United States and non-compliance would have seriously affected our ability to continue doing so. In fact we would have been blacklisted. We are happy that we have been able to put the necessary measures in place and the country's financial institutions can now look forward to business as usual with the US."
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