ECCU Working Group on FATCA Works towards Meeting Revised Deadlines
Basseterre, St. Kitts, September 17, 2013–The Eastern Caribbean Currency Union (ECCU) Working Group on the United States Foreign Account Tax Compliance Act (FATCA) continues to expend significant efforts to develop the compliance framework to ensure that licensed financial institutions in the ECCU meet the revised compliance deadlines.
FATCA, which the US Government enacted in March 2010, requires that Foreign Financial Institutions (FFIs) report information to the US Internal Revenue Service (IRS) on assets held by US taxpayers, or by foreign entities in which US taxpayers hold substantial ownership interest.
The original deadline for institutions to comply with this requirement was 1 January 2014. In July, the United States Department of the Treasury and the Internal Revenue Service (IRS) issued a joint notice announcing a six-month delay of the implementation of the FATCA.
The ECCU Working Group on FATCA, which the Eastern Caribbean Central Bank (ECCB) appointed in March, has established five sub-committees to enable the realisation of its mandate. These sub-committees are responsible for:
a) addressing the legal implications of FATCA;
b) establishing the role and power of the Competent Authority;
c) engaging in readiness assessments of the financial institutions of the ECCU;
d) promoting public education; and
e) assisting the negotiation teams of member territories.
All financial institutions in the ECCU will be classified as Foreign Financial Institutions (FFIs), and are required to have new account opening procedures in place by 1 July 2014 at which time certain payments by non-participating FFIs will be subject to a 30.0 per cent withholding tax. The institutions will also be required to register with the IRS through an online portal which is expected to open from 19 August 2013 to 25 April 2014.
The Working Group remains committed to its mandate to make recommendations to the ECCU Governments on the appropriate compliance response to the implementation of FATCA and endeavours to implement the harmonised legislative and regulatory compliance framework by the 1 July 2014 deadline.