C’bean banks support FATCA

However CAB “remains concerned” about the number of Caribbean countries who do not yet have IGAs in force and is therefore renewing its “call for Caribbean countries to enact the necessary legislation for the implementation of FATCA.” CAB warned that “failure to do so has far reaching implications for banks in terms of an increase in sovereign risk and its impact on their ability to conduct business.” In a statement issued on Tuesday, CAB added that it’s important to note that if a country does not have an IGA in force, “domestic financial institutions in that territory will have to establish an individual agreement with the US Government at significant cost, which may have to be passed on to their customers.” CAB reminded that failure to become FATCA compliant by the deadline given for each territory will result in a 30 percent withholding tax on any “payment of interest, dividends, rents, royalties, salaries, wages, annuities, licensing fees and other FDAP (Fixed, Determinable, Annual or Periodic) income, gains and profits, if such payment is from sources within the US.” Additionally, any gross proceeds from the sale or disposition of US property of a type that can produce interest or dividends and certain foreign pass-through payments will be liable to the 30 percent tax withholding.

CAB is a community of banks and other financial institutions in the Caribbean Region, which proactively influences issues impacting the financial services sector through advocacy, education and networking.