The Tribune

Bank of The Bahamas International yesterday said neither it nor its merchant clients will not be subject to the ‘28 per cent withholding tax’ that has begun to impact credit card transactions with firms who did not report their non-US status by December 31, 2012.

“American Express has designated Bank of the Bahamas merchants as non-US entities. This means our clients can comfortably continue to transact business as they normally do without fear of funds being withheld,” PaulMcWeeney, Bank of the Bahamas International’s managing director said.

In early 2011, the US government advised all US Merchant Acquiring Entities (credit card processors) to prove the status (US or non-US) of any business with whom they settle by December 31, 2012 or face the withholding come 2013.

American Express has taken an aggressive approach to this and effective January 1, 2013, began withholding taxes on all entities not designated as non-US entities.

Mr McWeeney said Bank of the Bahamas and its Merchants were not subject to this approach or several reasons:

He added that all entities the bank provides with merchant services are Bahamian owned and incorporate. Evidence of this is submitted to American Express upon application.

Mr McWeeney said all bank accounts where American Express transactions settle are a Bahamian dollar account held at the Bank of the Bahamas.

Due to the Bank’s current system platform, all the transactions of its American Express Merchants that are received by American Express are denominated in Bahamian dollars.