MADRID: An agreement that will pave the way for the implementation of the Foreign Account Tax Compliance Act (FATCA) between Trinidad and Tobago and the United States has been signed.
On Friday, Finance Minister Colm Imbert and US Ambassador John Estrada signed the agreement that was enacted in the United States in 2010. The agreement is a model IA Inter-Governmental Agreement (IGA), which is designed to improve international tax compliance through mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information.
In a statement , the Ministry of Finance described the signing of the IGA as “another milestone in the relationship between both countries on tax matters.” The signing brings to an end about three years of negotiations between the countries on the Agreement. “The signing is also timely as it was completed before September 30 deadline set for the exchanging of information between both countries.”
The twin island republic and the US will now move to bring the agreement into force. This would allow for the automatic exchange of information between both countries and also ensure that foreign financial institutions, including local banks and insurance companies, will not be subject to a 30 per cent withholding tax.
To bring the IGA into force, the Minister of Finance will take to the Parliament, the necessary legislation, among other things, to provide for the automatic exchange of information by the Board of Inland Revenue to the United States Inland Revenue Service. FATCA is part of US federal Law that requires American citizens and residents—both within and outside the US—to report on their non-United States financial accounts.