Regional countries to discuss FATCA

The Bahamas will host a one-day regional Foreign Account Tax Compliance Act (FATCA) workshop next week as Caribbean countries seek to comply with new regulations outlined by the United States.

Financial Services Minister L. Ryan Pinder said the workshop is being facilitated by the United States Treasury and Internal Revenue Services (IRS).

An invitation to attend the workshop has been extended to all CARIFORUM governments, as well as other regional governments not within CARIFORUM, including the relevant regulatory and central government agencies.

"We are also pleased to announce that the workshop will also be open to the private sector and that the workshop will feature presentations by United States Treasury officials from the International Tax Council and the Internal Revenue Service," Pinder told a news conference.

FATCA was signed into US law in 2010 through the US Hiring Incentives to Restore Employment Act and has the effect of designating financial institutions around the world, which receive US payments or deal with US clients as 'foreign financial institutions' (FFIs).

"Under FATCA, FFIs are required to register with the United States Internal Revenue Service (IRS) and to report certain account information to the IRS with respect to persons considered US persons for tax purposes," he said.

"Failure to report this information either directly to the IRS or through the relevant government agency can result in a 30 per cent withholding being applied to the institutions payments from United States sources. FATCA might be the most significant international matter facing the private sector in international financial centres," Pinder added.

The minister, who led a local delegation to Washington last month for a meeting with officials from the US Department of Treasury and the IRS, said: "We discussed with our US counterparts some of the concerns of The Bahamas with respect to FATCA, both from a policy standpoint and based on the discussions with industry. We also presented the options we felt could alleviate these concerns."

Pinder said that it was at that meeting that The Bahamas suggested that a workshop for the region would be beneficial to assist with better understanding the US legislation.

He said the April 9 workshop will cover a wide range of topics, including the definitions of foreign financial institutions and non-financial foreign entity, identifying red flags in transactions and an overview of the intergovernmental agreements.

- CMC