Governments around the world are joining the U.S. in its efforts to eliminate tax evasion by signing onto the Foreign Account Tax Compliance Act. While discussion surrounding FATCA has been ongoing for several years now, policies are just now going into effect in various parts of the world. The latest government to join the global tax compliance effort is the Federation of Saint Kitts and Nevis.
“New countries are still continuing to join the global effort to eliminate tax evasion.”
FATCA was originally announced by the U.S. Congress in March 2010, and seeks form reporting partnerships with governments and financial institutions all over the globe. According to Caribbean News Now, St. Kitts and Nevis signed an agreement with the U.S. on Monday, Sept. 9, to take part in the effort. “Every year, tax evasion deprives governments of all sizes of much-needed resources to fund public services and investments,” said Larry Palmer, U.S. ambassador to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States. “The United States welcomes St. Kitts and Nevis’ commitment to enhancing global financial transparency by improving international tax compliance. Today’s signing marks a significant development in our nations’ collaborative efforts to combat offshore tax evasion – an objective that mutually benefits our two countries. FATCA is yet one more example of the deep and substantial ways in which the economies of St. Kitts and Nevis and the United States are linked.” FATCA making headway This move was surprising to some, as the deadline for reporting financial information is not far away – Sept. 30 to be exact. This demonstrates that countries not only want to participate in the global effort, but are willing to do so quickly. There is no question that St. Kitts and Nevis will have to implement new measures to be compliant, and do so in a hurry, but by signing on to FATCA, the government has announced to the world its intention to do so. This move also shows that the current list of countries participating in FATCA is not set, as more governments from around the world continue to aid the effort. Penalties for withholding information can be up to 30 percent of each account. And now that the agreement has been signed, these financial and regulatory bodies will have until Sept. 30 to report account information to the U.S. Internal Revenue Service.
“Financial and regulatory bodies will have until Sept. 30 to report to the IRS.”
New regulations FATCA will now require financial institutions, service providers and governmental agencies to report on assets of more than $50,000 that belong to U.S. citizens, ex-pats and persons with green cards and $250,000 for U.S.-based entities. This will be a big change for these organizations and governments, which is why efforts to adopt new policies have been in the works for some time. According to the St. Kitts & Nevis Observer, plans to streamline reporting have been in place since July 2015. “We are now at the point where we need to ensure that the necessary legislation, systems and procedures are in place so that the Federation could be compliant with the Act,” said Sylvia Gumbs, Deputy Financial Secretary in the Ministry of Finance. “The consequences for non-compliance are significant and could cripple our financial services sector if we fail to be in state of readiness.” Even taking into consideration the tight deadline, St. Kitts and Nevis have demonstrated that global support for eliminating tax evasion is strong, and countries are willing to take whatever steps are necessary to be part of the solution.
