7 News Belize

FATCA, Do We Have To?
posted (June 21, 2013)
Unless you're a banker, you probably don't know what the term FATCA means – but the United States Foreign Account Tax Compliance Act has far reaching implications for Banking in Belize and all over the world. It's an instrument designed by the United States Internal Revenue Service to crack down on tax cheats; mainly US citizens and permanent residents who bank their money in other countries – and in so doing, evade US taxes.

Now, the IRS wants overseas banks to sign in time for implementation on December 31, 2013. That includes Belizean banks which had a special meeting with the Prime Minister yesterday to discuss the far reaching implications of FATCA. The banks are being forced to sign possibly as early as August – but there are many issues to iron out first. And we say "forced" because if the local banks don't sign, they lose their correspondent banking relationship with US banks, in which case, they'd basically have to close down.

But it's what you might call a "ticklish" issue because the banks will have to report to the IRS all US citizens or green card holders with over fifty thousand dollars in Belizean Banks. And there are heavy penalties against the banks and the individuals for non-reporting.

And, it's not only in Belize – it's all over the Caribbean. Our colleague at CEEN News in Jamaica Kalilah Enriquez recently attended a Diaspora conference where the issue was front and center. She explains the broad strokes and the finer details of FATCA:…

We reached the Prime Minister who said the government's position is still evolving as there is quote, "a significant shortage of information." He says that after careful study, Government will offer its formal position as to the best way to proceed.

We spoke to one local banker who told us there are significant practical issues that arise – because the banks don't know which of their depositors hold a US Passport or Green card. We'll keep following the story….

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7 News Belize