Extension for US tax compliance act

POSTED: 11/1/12 11:54 AM

St. Maarten – The United States of America has granted St. Maarten a one year extension on the implementation of the Foreign Account Tax Compliance Act (Fatca). “Since they saw the complications that are taking place as far as this legislation is concerned they have extended implementation to January 1, 2014,” Finance Minister Roland Tuitt said yesterday.

In 2010 the United States enacted Fatca. Foreign financial institutions like banks, pension funds, insurance companies, asset managers and private equity funds were supposed to have entered into an agreement with the IRS by June 30 of next year. These institutions are obliged under the new legislation to undertake certain identification and due diligence procedures with respect to its account holders and to report to the IRS annually on its account holders who are US citizens or foreign entities with substantial US ownership.

“I suppose the banks on the island will be happy with that but they will still have to continue with their preparations,” Tuitt noted while addressing the extension.

The government wants to get a meeting with the US to see how they negotiate an agreement for the implementation of the Fatca process. Tuitt said that his aim will be “to see how it will benefit us and banking and other institutions on the island.”

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