By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Bahamas is hoping for a “final sign off” by the US State Department on its Foreign Account Tax Compliance Act (FATCA) inter-governmental agreement (IGA) by this week, a Cabinet minister said yesterday.
Speaking with Tribune Business outside the House of Assembly yesterday, Ryan Pinder, minister of financiual services, said: “We are waiting on final sign off from the State Department, which is just a function of their internal approval process.
“We have been asked not to make public the actual IGA until that happens. We hope that that will happen this week, and we can have a public dialogue and information session on that next week.”
Bahamian financial institutions had been invited to register with the IRS Portal to receive a Global Intermediary Identification Number (GIIN) by May 5, 2014.
Under the terms of the IGA, all Bahamas-based financial institutions will have to supply the Government with the required information, with the latter then passing this on to the IRS/US Treasury.
“We haven’t received a report from the IRS on the number of institutions that have signed up. We would probably want to give it this week to get the the report from the IRS, and we’re planning on doing a public information consultation session on it as well; probably next week,” said Mr Pinder.
Cabinet last month ann ounced that it had approved “in principle” the Model 1 FATCA agreement between the Bahamas and the United States.
FATCA, which was brought into law in March 2010, is a set of rules set out by the US Internal Revenue Service (IRS) designed specifically to limit tax evasion by US persons living abroad.
Under FATCA, US taxpayers holding financial assets outside the US must report those assets to the IRS or face penalties. FATCA will also require foreign financial institutions to report directly to the IRS certain information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest.
The Government recently stated in a position paper to the OECD that to implement FATCA alone will cost between $4 to $10 million, with ongoing costs of over $200,000 per year.
Comments
Reality_Check 10 years, 4 months ago
Ryan Pinder seems quite content to have banks in the Bahamas provide the personal banking information of many Bahamian citizens to Uncle Sam under its FATCA initiative simply because of the PLP's stupid and ill-advised policy of letting Americans buy Bahamian citizenship. If you are a Bahamian by birth married to an American who has signing authority with you on any of your bank accounts with a balance over B$50,000, you can expect Ryan Pinder to cause all of your bank account information to be turned over to Uncle Sam even if your American spouse residing with you in the Bahamas for many years has never had any U.S. income tax filing requirement. Pinder just doesn't seem to give a damn about the privacy rights of non-American indigenous Bahamian citizens! Pinder has also gravely under estimated the number of wealthy prominent Bahamian voters there are who were born in the U.S. but (unlike himself) have lived in the Bahamas all of their lives and have not renounced their U.S. citizenship. Many of these Bahamians are big financial backers of the PLP or FNM. Because the Bahamian passports of these dual nationals show they were born in the U.S., banks here in the Bahamas will be called on to turn over to the IRS all of their personal banking records thereby subjecting them to draconian "failure to report" penalties imposed by the IRS. If the IRS penalties (which can amount to 50% or more of the highest balance in the bank account for each calendar year in which there was a failure to report) are not settled, the dual national could find him or herself indefinitely blacklisted by the U.S. government for travel to the U.S. It doesn't matter whether the bank accounts are denominated in Bahamian dollars or another currency. Bottom line: In his negotiations with the U.S. government/IRS regarding FATCA, Pinder failed to have provisions put in the IGA to protect the privacy rights of non-American Bahamians married to an American (e.g. housewife) who has never had any U.S. taxable income and has been residing in the Bahamas for many years.
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