The Bahamas Financial Services Board and the Association of International Banks & Trust Companies, in partnership with Deloitte, Ernst & Young, KPMG and Pricewaterhouse Coopers will host a half-day Roundtable on Tuesday, January 18 on key US Tax Initiatives impacting cross border financial services, with a particular focus on the Foreign Account Tax Compliance Act (FATCA) provisions, now a part of the US HIRE Act.
FATCA is a major step forward in the US tax enforcement focus on so-called “offshore” issues; basically, it requires information reporting about offshore assets and backs that requirement up with penalties. Foreign banks must either agree to disclose information about US investors or be subject to a statutory withholding regime. The IRS has said the 2001 Qualified Intermediary system is not without its limitations, being focused mainly on ensuring that withholding tax relief is appropriate, with almost no detailed information flows from the QIs to the IRS about the identity, income or overall tax position of any accountholder. Also, not all foreign financial institutions choose to be a QI. Commissioner Douglas Shulman of the IRS describes FATCA as “the most important development in international information reporting in a generation. It is a big step forward in our efforts to reduce tax evasion by creating transparency and accountability in the offshore financial markets.”
Tax Roundtable