By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE MINISTRY of Financial Services is set to host a regional workshop on the United States’ Foreign Accounts Tax Compliance Act (FATCA) next week.

“The Ministry of Financial Services in conjunction with the Bahamas Association of Compliance Officers (BACO) will host a regional Workshop on the United States’ Foreign Accounts Tax Compliance Act (FATCA). An invitation to attend the workshop has been extended to all CARIFORUM regional governments as well as other regional governments not within CARIFORUM, including the relevant regulatory and central government agencies. We are also pleased to announce that the workshop will also be open to the private sector and that the workshop will feature presentations by United States Treasury officials from the International Tax Counsel and the Internal Revenue Service (IRS),” said Financial Services Minister Ryan Pinder yesterday. The workshop is being facilitated by the US treasury and IRS officials.

Mr Pinder noted that FATCA was signed into US law in 2010 through the US Hiring Incentives to Restore Employment Act and has the effect of designating financial institutions around the world which receive US payments or deal with US clients as “Foreign Financial Institutions” (FFIs). “Under FATCA, FFIs are required to register with the United States Internal Revenue Service (IRS) and to report certain account information to the IRS with respect to persons considered US persons for tax purposes. Failure to report this information either directly to the IRS or through the relevant government agency can result in a 30 per cent withholding being applied to the institutions payments from United States sources. FATCA might be the most significant international matter facing private sector in international financial centres,” said Mr Pinder.

“On March 1, I led a delegation consisting of senior government officials from my Ministry and the Attorney General’s Office to Washington, DC for a meeting with officials from the US Department of Treasury and the Internal Revenue Service to discuss FATCA. The meetings were “direct and open”. The Bahamas was well prepared for the meeting. First and foremost, we highlighted that The Bahamas has been and is a trusted partner in the global process to responsibly improve tax information exchange and that our two nations have had a working tax information exchange agreement (TIEA) in place for well over 10 years. We discussed with our US counterparts some of the concerns of The Bahamas with respect to FATCA both from a policy standpoint and based on the discussions with industry. We also presented the options we felt could alleviate these concerns. It was at that meeting that The Bahamas suggested that a workshop for the region would be beneficial to assist with better understanding the US legislation. It should be noted that the FATCA regulations are over 500 pages long and cover almost every type of financial product offered in The Bahamas. In the circumstances, a technical workshop with all of the affected government agencies and practitioners was seen as the best way forward,” Mr Pinder said.

Next week’s workshop will cover topics such as the definitions of Foreign Financial Institutions and Non Financial Foreign Entity, as per the Regulations; providing an overview of the exceptions in the regulations; an overview of the account review requirements; methods in the regulations to determining beneficial ownership; identifying US indicia and red flags in transactions, timelines for compliance in the regulations and an overview of the Inter-Governmental Agreements.

“The first day is a day long symposium where the morning session will be a full session with all treasury and IRS participants. The afternoon will be a continued session with private sector ask treasury participants but all the governments will break off in the afternoon to have a joint multilateral discussion with treasury. The second day is reserved for bilateral discussion where countries individually will have discussion with the US treasury department and IRS,” said Mr Pinder. Registration can be confirmed through the Bahamas institute of Financial Services, phone number (242) 325-4921 or (242) 325-4955 or via email at financialservices@bahamas.gov.bs. There is a $100 registration fee for private sector attendees. Mr Pinder said that there have been confirmations from over 100 participants already, including from St Kitts, Barbados and other countries in the region.