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The member Governments of the Eastern Caribbean Currency Union (ECCU) have begun discussions with the United States of America towards an Inter-Governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA).
FATCA requires Foreign Financial Institutions (FFIs) to report to the US Internal Revenue Service (IRS) information on assets of USD50,000 or more held by US taxpayers, or by foreign entities in which US taxpayers hold substantial ownership interest. Failure of an FFI to submit information could result in a 30 percent withholding tax levied on certain payments, and may result in the potential loss of correspondent banking relationships.
The Government of Saint Kitts and Nevis disclosed that the ECCU member Governments have decided to pursue a Model 1 IGA. They have also undertaken to pass the "Foreign Account Tax Compliance (United States) Implementation and Enforcement Bill, 2014," to provide for legalize the submission of customer information to US authorities, it said.
The Government warned that all non-bank financial institutions are required to register on the IRS Portal prior to the April 25, 2014, deadline to avoid the imposition of the 30 percent withholding tax from July 1, 2014.
The ECCU comprises Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
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