Bahamas To Host Regional FATCA Workshop
I am pleased to announce that on Tuesday 9th April, 2013, the Ministry of Financial Services in conjunction with the Bahamas Association of Compliance Officers (BACO) will host a regional Workshop on the United States’ Foreign Accounts Tax Compliance Act (FATCA).
An invitation to attend the workshop has been extended to all CARIFORUM regional 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 Counsel and the Internal Revenue Service (IRS).
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” (FFIs).
Under FATCA, FFIs 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.
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 the private sector in international financial centers.
On March 1st, 2013, I led a delegation consisting of senior government officials from my Ministry and the Attorney General’s Office to Washington, DC for a meeting with officials from the US Department of Treasury and the Internal Revenue Service to discuss FATCA.
The meetings were “direct and open”. The Bahamas was well prepared for the meeting. First and foremost, 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.
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. It should be noted that the FATCA regulations are over 500 pages long and cover almost every type of financial product offered in The Bahamas.
In the circumstances, a technical workshop with all of the affected government agencies and practitioners was seen as the best way forward. Next week’s workshop will cover topics such as:
• The definitions of Foreign Financial Institutions and Non Financial Foreign Entity, as per the Regulations ;
• Providing an overview of the exceptions in the Regulations;
• An overview of the Account Review Requirements;
• Methods in the Regulations to determining beneficial ownership, Identifying US indicia and red flags in transactions;
• Timelines for compliance in the Regulations;
• An overview of the Inter-Governmental Agreements.
The workshop will also feature a closed door session between the Treasury Officials and Regional Governments to discuss in more detail about (A) Differences in the Model 1 and Model 2 Inter-Governmental Agreements; (B) the relationship between FATCA and existing TIEAs (C) Legislative changes that may be necessary to comply with FATCA and (D) the role of the IRS in the FATCA compliance process.
We are pleased to advise that the meeting is open to all CARIFORUM member states which included CARICOM countries plus the Dominican Republic, as well as other regional governments.
More than a dozen regional governments or Central Banks have already indicated their desire to participate in the workshop. The meeting is being held immediately before a CARIFORUM Financial Services Task Force Meeting which should further facilitate regional participation.
Finally, we are very grateful for the support of the Caribbean Export Development Agency (CEDA) for funding the participation of some of our CARIFORUM participants. We also express our gratitude to the Bank of Jamaica for its assistance in contacting regional Central Bank participants.
We thank the US Embassy here in Nassau for their assistance in facilitating the presence and participation of IRS and Treasury Department officials. 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.
We are also grateful for the assistance of BACO in the logistical arrangements for this workshop.
Registration can be confirmed through the Bahamas institute of Financial Services, phone number (242) 325-4921 or (242) 325-4955 or be emailing us at firstname.lastname@example.org.
There is a $100 registration fee for private sector attendees. I encourage all interested parties to register as space is very limited and is filling up fast.
We look forward to a ground breaking productive workshop.
— Ryan Pinder
Minister of Financial Services