American Chamber of Commerce of T&T (AmCham) yesterday called on government to bring legislation to the Parliament governing the Foreign Account Tax Compliance Act (FATCA) so T&T can meet the September 30 deadline for implementation.
FATCA became law in the US in March 2010 and since then the American Chamber of Commerce of T&T (AmCham) said it had been very vocal on the issue. The law was put into place to ensure that US citizens, green-card holders as well as non-resident citizens file their taxes.
In a statement, the group called for the "timely enactment" of legislation so that local financial institutions can be guided by it. Adding that given the September 30 deadline for the legislation to be implemented, Minister of Finance Colm Imbert should address the issue.
"The US is still a major trading partner of T&T and non-compliance by the stipulated deadline could pose a major challenge for operations within financial institutions, gravely impacting our ability to do business."
According to the website of the US Internal Revenue Services, the law focuses on reporting "by US taxpayers about certain foreign financial accounts and offshore assets, as well as by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest."
In late June, the leaders of Republic Bank Ltd, Scotiabank, RBC, JMMB Bank Ltd called for the legislation to be taken to the Parliament, the Model 1A Inter-Governmental Agreement (IGA) to be signed and the system for collecting data at the Board of Inland Revenue put in place.
Frustrated that T&T was not yet compliant, the bankers called a news conference to highlight the implications for T&T if the country was non-compliant. The bankers had said they had been lobbying for T&T to be compliant for several years spanning two administrations and it was now critical for the measures to be put in place.
Imbert, in a statement to the T&T Guardian, had signalled his intention to meet with the Opposition about the legislation since it required a special majority in order for the legislation to pass in the Parliament.
One of the implications for being non-compliant is that a withholding tax of 30 per cent can be implemented on the US dollars flowing into T&T's banking system from the US.
Commenting on the implementation of the tax, AmCham said there were complexities surrounding the tax including the "legality of the withholding provisions given the account holder's contractual rights, demanding customers to give up their privacy rights or closing their accounts and perceived conflict with the Data Protection Act."
Overall, AmCham said there were more questions than answers concerning the FATCA law specifically the general principles, breadth of scope and the implications of FATCA. But it called for the reformation of the Board of Inland Revenue, which it said "would allow for greater efficiency of tax collection. Action towards its efficiency is a critical component if we are to enforce the obligations and responsibilities under the IGA."