The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Ministry of Financial Services is set to issue a tender for the development and implementation of a Foreign Account Tax Compliance Act (FATCA) reporting system, its director said yesterday, adding that it was working towards a December deadline to have its draft legislation released for industry consultation.

Speaking at a Bahamas Association of Compliance Officers (BACO) seminar yesterday, Nicole Virgill-Rolle, director of the Ministry of Financial Services, 
said a Request for Proposal (RFP) process had been approved, with a firm expected to be selected by November to develop and implement a FATCA reporting system.

“We have produced a draft agreement. We are now in the process of drafting the legislation that would implement the agreement and also industry guidelines. FATCA is written in US tax language, and we need to translate that into common law language, language that is very easy to understand,” said Mrs Virgill-Rolle.

She added that the document would be a “standalone” document” which does not rely on any tax information exchange agreement (TIEA), for instance, and “doesn’t go beyond” FATCA.

The Government has chosen a Model I Intergovernmental agreement (IGA) with the US Treasury for FACTA compliance. Mrs Virgill-Rolle said this model gives the Bahamas the best preferential treatment in key areas and was strongly preferred by the ] financial services industry.

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 had appointed an inter-ministerial committee on FATCA under the leadership of the Ministry of Financial Services to prepare an implementation strategy, inclusive of a draft FATCA agreement.

It was also charged with preparing and issuing a request for proposal (RFP) for the development and implementation of a FATCA reporting system, and to oversee all aspects of the implementation of the Bahamas’ FATCA compliance.

“We are working towards a December deadline to get our draft legislation released for consultation, and guidelines released by February,” said Mrs Virgill-Rolle.