As we are working on tax returns for many U.S. clients with international investments, we find that there is a false sense of security based on the information from the people who sell them the foreign investment. There are two issues that are of concern. For the tax payer, who is filing their return, if we fail to do the correct thing there is a minimum civil penalty of $10,000 or a penalty of 50% of the value of the asset. Another important issue Read more
Tag Archive for Financial Institutions
Few American laws have been as controversial as FATCA. FATCA stands for Foreign Account Tax Compliance Act, a law passed in 2010 to clamp down on the use of foreign bank accounts by U.S. taxpayers to hide money that is otherwise subject to taxation in the United States. FATCA is the U.S. government’s newest enforcement tool in the fight against international tax evasion.
Those that denounce the law criticize its complexity, its expansive reach, and the high cost of compliance. Those that like it (and there are some) argue that it will blow the lid off of “the old way of exchanging tax information between countries on request,” which they view as too lenient on tax cheats. FATCA, they predict, will revolutionize the exchange of information, by making it “automatic,” thereby removing any safe harbors for those Read more
In an effort to crack down on tax evasion the OECD developed what it calls a “New single global standard for the automatic exchange of information between key authorities worldwide.” The standard was approved by the OECD council on 15 July 2014 and is expected to result in an elimination of the secrecy surrounding some banking transactions as it relates to tax matters.
The new standard has been endorsed by more than 60 countries or jurisdictions including the United States, United Kingdom, European Union and Canada and other major jurisdictions already committed to implementation.
The standard requires detailed account information to be provided to governments by financial institutions. The information obtained from the financial institutions will be Read more
In his contribution to the House of Assembly, on August 12, 2013, Minister of Financial Services Ryan Pinder said that the Bahamas Government has agreed that the country will achieve compliance under the United States Foreign Accounts Tax Compliance Act (FATCA) by negotiating and entering into a Model 1 Intergovernmental Agreement (IGA) with the United States Department of the Treasury.
Minister Pinder said: “The Government of The Bahamas has also agreed to the establishment of an inter-Ministerial committee on FATCA under the leadership of the Ministry of Financial Services be established with the following mandate: to prepare an implementation strategy for FATCA, inclusive of the draft FATCA Agreement; to prepare and Read more