The United States Government (US) administration enacted the US Foreign Account Tax Compliance Act (FATCA) in March 2010, as part of the Hiring Incentive to Restore Employment (HIRE) Act. As a signatory to FATCA, Barita Investments Limited (as well as all other Jamaican financial institutions), will be required to disclose and report certain information on US Account holders or US owned foreign entities to the Internal Revenue Service (IRS) effective July 01, 2014.
What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is a US tax law that is designed to prevent tax evasion and improve the tax compliance of US taxpayers who earn income from investing in offshore investment vehicles and Foreign Financial Institutions (FFIs).
How will FATCA work?
Financial houses outside the US are classified as FFIs. FATCA will require all FFIs to enter into a disclosure agreement with the United States Internal Revenue Service (IRS). In signing the agreement, FFIs agree to:
What does 'Certain Information' include?
Certain Information includes the following, and is to be made on 'Specified US Persons/Entity':
Who is classified as a 'Specified US Person/Entity' or person with US indicia?
According to FATCA, a specified U.S. person/entity or the indicia of a U.S. status includes:
N.B. Accounts held jointly with U.S. persons will also be treated as a U.S. account, and is therefore subject to reporting.
How will this impact you?
Who are "recalcitrant" account holders?
What does U.S. source income include?
Does FATCA comply with privacy laws and what are the consequences for non-compliance?
The Jamaican government entered into an Inter-governmental Agreement (IGA) with the United States Government effective May 1, 2014, which has made the necessary legislative changes that will ensure that these disclosures do not breach Jamaican law.
However, we may seek to obtain your waiver and ask that you acquiesce with this request, as FATCA has mandated that financial institutions are required to treat uncooperative account holders (including joint holders) as recalcitrant and either close the account or withhold 30% on all pass through payments and gross proceeds from the sale or disposition of U.S. assets which can produce interest or dividends.
Please note that FATCA became effective July 01, 2014. For more information on the implications of FATCA, please visit the IRS website at www.irs.gov
For more information on FATCA, please speak to a Barita Client Services Representative at: