Jamaica At Final Stage To Implement FATCA
Next week, Jamaica and the United States (US) will officially sign the intergovernmental agreement (IGA) to implement the US’ Foreign Account Tax Compliance Act (FATCA), putting the island well ahead of its CARICOM counterparts.
“We have actually signed off on the text of the agreement and it is going to be signed between the minister of finance and the US charge d’affaires next week at the Ministry of Finance,” John Robinson, senior deputy governor at the Bank of Jamaica, told The Gleaner yesterday. “So we are well advanced in terms of documentary preparation for implementing this agreement, and the IGA takes effect upon signing.”
FATCA is aimed at accessing tax information on US citizens who have incomes abroad, and under the reciprocal agreement, the Jamaican tax authority will obtain similar information on Jamaican taxpayers who may be earning income or have deposits or other investments abroad.
MORE TIME TO REGISTER
Originally slated to be completed by tomorrow, financial institutions now have until May 5 to complete the registration for the reporting of the data.
Both countries will begin exchanging tax information between the respective tax departments – Tax Administration Jamaica (TAJ) and the US Internal Revenue Service (IRS) – by January of next year.
“Given that we had already reached an agreement in principle, and because we have reached this far this early – well ahead of other Caribbean countries – the US authorities have given the go-ahead for institutions to start registering already, and have published an … agreement on their website so that financial institutions here can already begin the registration process,” he said.
Once the legislation is in force, TAJ will begin collecting information from the financial institutions and pass it on to the IRS, while receiving similar information in return.
Aimed at fighting tax evasion among registered US taxpayers, under FATCA, the IRS requires firms across CARICOM countries to report information on accounts with balances over US$50,000 held by US citizens.
However, Jamaica is yet to finalise a threshold from its end.