Caribbean American citizens and permanent residents who hold large sums of cash in overseas bank accounts or have investments in trust and related companies as well as hold disposable assets will soon have to report these to the IRS or face stiff penalties in new laws being enforced from the end of September.
CARICOM member countries which have not set signed up inter governmental bilateral agreements with the United States are rushing to do so, well aware that their could be blacklisted by Washington as unwilling compliers with the Foreign Account Tax Compliance Act (FATCA).
As August came to a close, authorities in Trinidad, the largest economy in the community of 15 mostly island nations, made quick steps to do so, formally signing the relevant tenants of FACTA and opening the way for an automatic exchange of financial information on Americans with cash and assets stashed overseas.
Back in March of 2010, Congress passed the controversial bill to catch alleged tax cheats, including those who use offshore accounts in the Caribbean and beyond to hide assets from the IRS.
The act requires Caribbean commercial banks to submit details about assets and cash of American citizens and permanent residents. The U.S. is also required to furnish information on Caribbean residents who stash cash and have assets in mainland America and its territories such as Puerto Rico.
Several member states including Barbados and St. Kitts have already signed bilateral agreements with the U.S., anxious to avoid being blacklisted by the international community, western industrialized countries in particular, as law enforcement fights international money laundering efforts and alleged financing of terrorism.
Trinidad’s government said in a weekend statement that the system is almost ready to provide the IRS with the necessary information on assets held in local banks, trust and related companies.
“This is another milestone in the relationship between both countries on tax matters and brings to an end approximately three years of negotiations occurring between the two countries on the agreement. To bring the agreement into force, the finance minister 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,” the statement said.
The announcement came a few days before Guyana’s Finance Minister Winston Jordan announced the country’s readiness to also sign on with the U.S., being fully aware that the end of September deadline looms.
By Bert Wilkinson CLM