KINGSTON, Jamaica, Thursday July 23, 2015 – Financial institutions in Jamaica will for the first time, from next month, have to report specified financial account information on American citizens who have accounts in that Caribbean island to US authorities.
This follows the passage of amendments to the Revenue Administration Act earlier this week, which gives legislative effect to an agreement signed by the US and Jamaican authorities in May 2014 as part of the Foreign Accounts Tax Compliance Act (FATCA).
Piloting the amendment Bill received support from both sides, Minister of Finance and Planning Dr. Peter Phillips told Parliament it would facilitate the introduction of an international tax compliant regime and give effect to greater transparency of information for tax purposes, adding that it contemplates the advent of new international standards and instruments.
“The Foreign Accounts Tax Compliance Act (FATCA) of the United States (US) represents one such instrument and the agreement to give effect to this, which was signed by the Government of Jamaica and the US, has to be incorporated into our domestic legislation,” he explained.
Under the amendments, effective August 17, financial institutions in Jamaica will be required to make the relevant financial reports to Tax Administration Jamaica (TAJ) on financial accounts held by US taxpayers, including entities in which the US taxpayer holds a significant ownership interest.
However, for all subsequent years, the reporting date will be May 31 of each year.
The TAJ will also have to submit the relevant information received from local financial institutions to the Internal Revenue Service (IRS) in the US.
FATCA, which was enacted in 2010 by the US Government as part of provisions under the Hiring Incentives to Restore Employment Act, is an important development in the US’ efforts to combat tax evasion by US tax payers with investments in offshore accounts.
Currently, Jamaica has some 11 double taxation agreements, nine tax information exchange agreements and one multilateral double taxation agreement within CARICOM.