The Barbados Government is set to start negotiations with the United States on a reciprocal Model 1 Inter-Governmental Agreement (IGA) that will give effect in Barbados to the provisions of the Foreign Account Tax Compliance Act (FATCA).
Minister of International Business, the Hon. Donville Inniss made this pronouncement as he gave the Welcome Address at a FATCA Symposium, held at the Hilton Barbados on Monday, March 3. The Symposium, which was sponsored by the Central Bank of Barbados, Invest Barbados, the Financial Services Commission and the Ministry of Industry, International Business, Commerce and Small Business Development, was organised to sensitise participants about matters relating to FATCA and Barbados’ preparation and progress to date.
Speaking to the 200 attendees, who mainly comprised business persons from the International Business and Financial Services sector, Minister Inniss indicated that Barbados was “not alone in relation to FATCA”, as several countries had already signed IGAs with the USA and other countries were currently negotiating to sign on.
FATCA, which was passed as a federal law in the USA during 2010, requires foreign financial institutions to provide the US Internal Revenue Service with information relating to financial accounts that are held by US taxpayers or any foreign company in which US taxpayers hold a controlling interest. To date, 22 countries have signed on. FATCA also requires US financial institutions to impose a 30% withholding tax on payments made to foreign banks and other financial institutions that refuse to meet the terms of the new law.
Led by a FATCA Task Force comprising representatives from the Symposium’s sponsors and members of the private sector, preparations are in train to conclude the IGA by April 30, 2014. Minister Inniss however indicated, “Barbados will have at least until September 30, 2015 to ensure that all matters needed to operationalise FATCA, including the passage of legislation, are in place”.
The Symposium featured presentations from local and international experts, who addressed topics including Barbados’ FATCA Implementation Action Plan; FATCA: the USA’s Experience thus far; International Trends in Tax Information Exchange; as well as the IGA and its Annexes.