An expert in the Foreign Account Tax Compliance Act (Fatca) said failure to comply with that law may affect the ability of a company to conduct business with compliant entities.Michael Goddard, a Washington-based financial services and IT consultant, made the point during a Fatca Executive Roundtable hosted by Fujitsu Caribbean (Trinidad) Limited at the Hyatt Regency in Port-of-Spain yesterday.
Fatca is an important development in efforts by the United States to improve tax compliance involving foreign financial assets and offshore accounts. It requires foreign financial institutions to report directly to the IRS information about financial accounts held by US taxpayers, or held by foreign entities in which US taxpayers hold a substantial ownership interest.Goddard said Caribbean nations are not necessarily against FATCA, but their efforts to determine what institutions can be compliant are lengthening the compliance process."What they are doing is exploring the anti-government agreements which allow them to identify certain types of organsiations or products that could be offered within a country that would be deemed compliant.
"For example, they may look for small credit unions where you can say we do not have a large US base. Perhaps, they might be deemed de-compliant institutions which would eliminate them from doing the level of due diligence and costly changes that might be required for a larger organisation."
Giddard explained that due diligence would not be done on the products which are not offered to the US citizens such as retirement plans or savings plans.
