The US Department of the Treasury and the Internal Revenue Service said that “due to overwhelming interest from countries around the world, a six-month extension to the start of the Foreign Account Tax Compliance Act (FATCA) withholding and account due diligence requirements will be provided to allow more time to complete agreements with foreign jurisdictions”. The Treasury Department said the six-month extension, to July 1, 2014, will also provide Caribbean and other foreign financial institutions (FFIs) with “the time necessary to comply with FATCA while helping to ensure efficient implementation of the law.
“Given the groundswell of international interest in FATCA, we are providing an additional six months to complete agreements with countries and jurisdictions across the globe, before withholding begins,” said Treasury Deputy Assistant Secretary for International Tax Affairs Robert B. Stack in a statement. “The high volume of international participation in this effort represents a quintessential race to the top,” he said. “Every additional country we bring on board means we are one step closer to winning the fight against offshore tax evasion.”
Enacted by the US Congress in 2010, FATCA targets non-compliance by US taxpayers using foreign accounts and “establishes a global approach to combating offshore tax evasion,” the Treasury Department said. The FATCA requires US financial institutions to withhold a portion of payments made to FFIs who do not agree to identify and report information on US account holders. To make compliance with the reporting requirements of FATCA feasible, particularly for FFIs in jurisdictions where existing laws prohibit this type of reporting, the US Treasury Department said it has developed intergovernmental agreements (IGAs) that rely on governmental cooperation to facilitate the exchange of FATCA information.
The Treasury Department said while the start of withholding and due diligence will be extended to July 1, 2014, the first report of information under FATCA continues to be due in 2015, and will include information about accounts maintained during 2014.
For more information, see http://rjrnewsonline.com/local/caribbean-given-more-time-to-comply-with-us-offshore-tax-law