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The Government of Barbados and the United States have signed an inter-governmental agreement (IGA) to facilitate compliance with the US Foreign Account Tax Compliance Act (FATCA).
FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the US Internal Revenue Service obtains information on the financial accounts of US persons held by foreign financial institutions (FFIs). Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
Barbados's Minister of Industry, International Business, Commerce, and Small Business Development, Donville Inniss, said, "The signature of this FATCA agreement represents one of the salient pillars in the transformation of how we as an international business and financial services center interact – not only with other jurisdictions on the sharing of vital information, but [it] is an indication of the transformation of how we interact with our clients and apply greater due diligence in an ever-changing environment."
US Ambassador to Barbados Larry Palmer said: "The FATCA introduces reporting requirements for foreign financial institutions with respect to certain accounts held by US taxpayers. Because access to information from other countries is critically important to the full and fair enforcement of domestic tax laws, information exchange is a top priority for the United States. By working together to detect, deter, and discourage offshore tax abuses through increased transparency and enhanced reporting, we can help to build a stronger, more stable, and accountable global financial system."
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