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The Bahamas will host a one-day Regional Foreign Accounts 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 that 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 (Caribbean Forum) 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.
Pinder said that 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” (FFI’s).
“Under FATCA, FFI's 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% withholding being applied to the institutions payments from United States sources. FATCA might be the most significant international matter facing private sector in international financial centers.” He added.
Pinder, who led a local delegation to Washington last month for a meeting with officials from the US Department of Treasury and the Internal Revenue Service to discuss FATCA, said “we highlighted that The Bahamas has been and is a trusted partner in the global process to responsibly improve tax information exchange and that our two nations have had a working tax information exchange agreement (TIEA) in place for well over 10 years.
“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 FATCA regulations consist of more than 500 pages and cover almost every type of financial product offered in The Bahamas.
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 inter-governmental agreements.
He said the workshop will also allow for “a closed door session” between the US Treasury officials and regional governments.
“I believe this is the first of its kind in the Caribbean region, where US officials converge to discuss with private sector, some participants from throughout the region, as well as multilateral and bilateral discussions with regional governments.
“The meeting is being held immediately before a CARIFORUM Financial Services Task Force meeting which should further facilitate regional participation,” he added.