The Tribune

By NATARIO McKENIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas is aiming to be “fully signed up” and compliant with the US Foreign Account Tax Compliance Act (FATCA) by July 1, with the Government seeking to finalise discussions on its intergovernmental agreement (IGA) with the US Treasury by next month.

Ryan Pinder, minister for financial services, said yesterday: “We have completed our initial comments to the intergovernmental agreement we will be signing with them [the US].

“We anticipate that being sent to the US in a matter of weeks, if not this week. We will try to finalise the negotiations and discussions on the intergovernmental agreement by next month to be on pace for our timeline of implementation. We are still progressing very aggressively on FATCA. We still believe we are the leaders with respect to matters related to FATCA.”

The Government has chosen a Model I Intergovernmental agreement (IGA) with the US Treasury for FACTA compliance.

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 them 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.

  Regarding the Bahamian financial services industry’s FATCA preparedness, Mr Pinder expressed confidence while noting that it was a “big pill to swallow”.

“It’s a significant initiative which will require a collaborative effort between government and industry straight through to implementation. We are committed to assist the industry in that regard,” he added.

Mr Pinder, meanwhile, said said 14 firms, both Bahamian and international, had responded to the Government’s request for proposal (RFP) to develop and implement a FATCA reporting system.

“We have received about 14 responses back on that, both from  domestic and international institutions. We are in the process of doing the proper framework for categorising and ranking the responses, which is ongoing, and we will be in a position to bring our recommendation to Cabinet next month based on the responses we’ve received. That’s on the Government infrastructure side of it,” said Mr Pinder.