FATCA Again

On two occasions, on September 9, 2016 and December 9, 2016, the Tax Information Exchange Agreement Bill 2016 was laid for debate in Parliament and in the both instances, the Opposition walked-out. The Bill was taken to a whole committee of the House of Representatives on December 12 2016. However, the Opposition once again chose to abstain from the debate.

The Government currently has 23 members in the House of Representatives, but 26 votes are required to pass the Bill, which means that a minimum of three votes are needed from the Opposition. Consequently, the Tax Information Exchange Agreements Bill 2016, cannot be passed without support from the Opposition, as the legislation requires a three-fifths majority, which Government does not have now. Trinidad and Tobago has until February 2017 to pass the relevant legislation to give effect to the IGA in order to begin reporting to the IRS by September 30 2017.

The Opposition continues to hold the position of requiring a Joint Select Committee (JSC) to review the Bill and has even gone as far as to identify members to sit on this Committee. The natural question would then be, what is the value of a JSC? According to the Parliament website, these Committees are established to consider and report on important issues. Such issues may be legislative, financial or investigatory. The operational procedures of these Select Committees allow them wide powers to fully consider their mandates and facilitate an interaction between Members of Parliament and Government officials, interested parties, legal and other professional associations and the general public in deliberations on a wide variety of subjects. At the end of their deliberations, these Committees report back to their principal Houses, stating their findings and observation and recommending acceptance or rejection of the legislation. This is as opposed to the whole committee of the House of Representatives which, as it states, is made up of the House of Representatives. Maybe the Government can explain why the outright refusal to consider a JSC outside of saying that it is just not necessary and furthermore having reneged on its previous position.

Interestingly, the IRS website states that all IGAs (not FATCA legislation) contemplate that a partner government will require all foreign financial institutions located in its jurisdiction (that are not otherwise exempt) to identify US accounts and report information about US accounts. It further states that an IGA can be implemented without having in effect a double tax convention or tax information exchange agreement with the United States. Maybe the Government can advise whether this is indeed the case and if so, what does this mean for us?

Lastly, the Attorney General mentioned that in November 2016, the Global Forum on Transparency and Exchange of Information for Tax Purposes found Trinidad and Tobago was one of three countries in the entire forum to be non-compliant. He added though that the Government has sought to address the issue by engaging to sign a multilateral convention with the Global Forum that would take the country out of default. Again, one has to wonder what does this mean for the country and why are stakeholders and citizens not engaged or informed of these details.