Fi­nance Min­is­ter Colm Im­bert and US Am­bas­sador John Estra­da yes­ter­day signed an agree­ment that will pave the way for the im­ple­men­ta­tion of the For­eign Ac­count Tax Com­pli­ance Act (FAT­CA) en­act­ed in the Unit­ed States of Amer­i­ca in 2010.

Im­bert signed on be­half of T&T, while Am­bas­sador signed on be­half of the US.

The agree­ment they signed was a Mod­el IA In­ter-Gov­ern­men­tal Agree­ment (IGA), which is de­signed to im­prove in­ter­na­tion­al tax com­pli­ance through mu­tu­al as­sis­tance in tax mat­ters based on an ef­fec­tive in­fra­struc­ture for the au­to­mat­ic ex­change of in­for­ma­tion.

FAT­CA is part of US fed­er­al Law that re­quires Amer­i­can cit­i­zens and res­i­dents–both with­in and out­side the US–to re­port on their non-Unit­ed States fi­nan­cial ac­counts.

In a state­ment yes­ter­day, the Min­istry of Fi­nance de­scribed the sign­ing of the IGA as "an­oth­er mile­stone in the re­la­tion­ship be­tween both coun­tries on tax mat­ters." The min­istry said the sign­ing brought to an end about three years of ne­go­ti­a­tions be­tween the two coun­tries on the Agree­ment.

"The sign­ing is al­so time­ly as it was com­plet­ed be­fore Sep­tem­ber 30 dead­line set for the ex­chang­ing of in­for­ma­tion be­tween both coun­tries.

T&T and the US will now move to bring the IGA in­to force. This would al­low for the au­to­mat­ic ex­change of in­for­ma­tion be­tween both coun­tries and al­so en­sure that for­eign fi­nan­cial in­sti­tu­tions, in­clud­ing lo­cal banks and in­sur­ance com­pa­nies, will not be sub­ject to a 30 per cent with­hold­ing tax.

To bring the IGA in­to force, the Min­is­ter of Fi­nance will take to the Par­lia­ment, the nec­es­sary leg­is­la­tion, among oth­er things, to pro­vide for the au­to­mat­ic ex­change of in­for­ma­tion by the Board of In­land Rev­enue to the Unit­ed States In­land Rev­enue Ser­vice.??