The Freundel Stuart administration wants the United States to provide it with information on the accounts of Barbadian taxpayers who have investments in American financial institutions.
But Minister of International Business Donville Inniss said this morning, the Government has made the request for a reciprocal arrangement as both countries negotiate an Inter-Governmental Agreement (IGA) that would give effect to the provisions of a Foreign Account Tax Compliance Act, enacted by Congress.
Addressing a seminar to sensitize financial institutions on FATCA at Hilton Barbados Resort, Inniss said the IGA, which is expected to be enforced by July first this year, will require financial institutions in Barbados, to annually collect information on American taxpayers, who are
He pointed out that such collection would begin next year, but the local FATCA Implementation Unit was targeting April 30 to conclude negotiations and put the agreement into operation about two months later.
While the minister is giving the assurance that the Act would not affect ordinary Barbadians who are living, maintaining bank accounts and working here, and are deemed not to be US taxpayers, he is concerned about the plight of those with
“Who don’t have sizeable bank accounts in the US need not worry. Those who are dual citizens would have their challenges, but of course it all ties into the threshold that we are negotiating which is US$50,000 bank account, plus insurance, cash surrender value in excess of $100,000. But ordinary Barbadians would not have a fear,” declared the cabinet minister.
“My concern . . . will be those living in the US, but bank back here in Barbados, they may have been saving for retirement, or they may have had a property that the old man or old lady died and left, and they sold it and converted it to cash and kept it in a bank account here. The fact remains, they are also Americans, and they would be subject to such, once the threshold is met and triggers review by the bank that they are dealing with, or the insurance company. That would be my main concern.”
Inniss is insisting that everyone must be sensitized, because issues such as these are not normally researched and read about by the average person.
“Of course,” he suggested, “the banks have their job to do. The banks are not going to [be] prying around or asking if you have dual citizenship and all of those things, the onus is going to be on the individuals to a large extent to do their own checking.”
He disclosed that the Barbados government will be talking to the US about exempting certain categories of Barbadians from the scrutiny of the tax collection net.
“The Government of Barbados will negotiate with the US, to ensure that institutions like credit unions, pensions funds, government entities and international institutions that present a low risk of US tax evasion, are exempted from the provisions of FATCA under a special annex to the IGA,” the international business minister promised.
“The Government, through my ministry and the FATCA Task Force, will be channelling its energies in the coming months, to the preparatory work for FATCA implementation, including such matters as public education and continued dialogue with the financial industry,” he stated.