US Tax Payers with accounts get compliance date pushed ahead to 2014
The Law on Foreign Account Tax Compliance (FATCA, Foreign Account Tax Compliance Act), designed to curb evasion of US tax payers with accounts at financial institutions both within and outside the borders of this country is a challenge for the national financial system.
The point of contention is that FATCA Act-passed in 2010 – requires financial institutions in the world not only to identify but also to disclose the direct and indirect holders of accounts.
However, a point in favor of financial institutions is that some obligation dates were delayed. For example, the contract they had to sign and disclose the account entities with the Treasury Department moved from July 1, 2013 to December 31 of that year, therefore measures are being undertaken by all financial institutions moved that date to the January 1, 2014.
Among the challenges faced by banks, mutual funds and brokerage houses are the implementation of a technical committee, implementation of new technologies and the full identification of each U.S. citizen or resident. It must be added that the law requires financial institutions outside the United States to sign an agreement to send to the Internal Revenue Service (IRS) of the U.S. Americans deposit information, not getting that signature causes a retention signed 30% of the interest and dividends generated by the entity in that country.
The US government is negotiating agreements in which financial institutions, instead of reporting the information to the IRS, would report to the appropriate department of the state. In the case of Costa Rica, this responsibility would rest with the Ministry of Finance and this in turn would report to the IRS.
The BCR noted that indeed the U.S. government postponed one year, therefore sending the first report is passed on March 31, 2015.
The National Bank, said that they have been working on the FATCA issue for just over a year. A issues of concern is the amount of information requested by our customers at the time of account setup, when these people qualify as subjects to that Act Additionally, the process of detection of those customers that qualify them would make them subject to IRS reporting.
Meanwhile, the Latin American Federation of Banks (FELABAN) expressed concern about the possible violation of legal regulations with the implementation of FATCA law, and that while they support the law; there are concerns about possible violations to the American legal orders (bank secrecy, taxation, consumer protection).
The Costa Rica News (TCRN)
San Jose Costa Rica
