US requires Tax Payment from Permanent Residents in the Caribbean
Basseterre, St. Kitts (SKNIS) — Financial stakeholders from the federation, is presently attending a workshop to boost the compliance of the Foreign Accounts Tax Compliance Act (FATCA) designed to increase reporting of foreign financial assets by the US tax payers.
The two-day workshop is organized by the Ministry of Finance, in collaboration with the National FATCA Committee.
Sylvia Gumbs, Deputy Financial Secretary in the Ministry of Finance highlighted FATCA’s importance.
“FATCA is a piece of legislation that has already affected the way that financial institutions around the world conduct business,” she said, while stating that the impact will go beyond the financial institutions themselves. “It will be felt by the clients who will be subjected to a higher level of due diligence, regulators of the industry, auditors and the government; that will be responsible for transmitting the financial institution data to the Internal Revenue Service (IRS).”
FATCA was enacted in 2010, but took several years to operationalize. The federation is now at a point where there is need to ensure that the necessary legislation, systems and procedures are in place in order for St. Kitts and Nevis to be compliant with the act.
“The consequences for noncompliance are significant and could cripple our financial service sector, if we fail to be in a state of readiness,” she said. “Of the various Inter-Governmental Agreements (IGA) that was presented, the government of St. Kitts and Nevis, after consultation with the various stakeholder groups, opted to sign the Model 1B IGA.
“To date however, the IGA has not been signed and we have been urging our contacts at the US Embassy in Barbados to impress upon the relevant authorities in Washington for it to be concluded urgently.”
St. Kitts and Nevis is included among all the member states of the Eastern Caribbean Currency Union (ECCU) who have not signed the document.
FATCA is a part of the United States hiring incentives to restore the employment act.
The workshop will conclude on Friday, (July 10). Topics for discussion include: Intergovernmental Agreements (IGA), FATCA Timeline, FATCA Due Diligence, Treatment of Specific Institutions/Products, FATCA Reporting, Responsible Officers, FATCA Internal Controls, Compliance Verification, Becoming Compliant and Support/Advice to Your Clients.