via Let’s Talk About: US Tax http://bit.ly/2cjxAel
(For the avoidance of doubt, I am not the author of this material. I am simply posting a link.)
It will be recalled that a country could have signed an Intergovernmental Agreement (IGA) with the United States to enforce the provisions of the Foreign Account Tax Compliance Act (FATCA), but the IGA is not yet considered to be “in force”. This is so because many partner jurisdictions that have signed IGAs or reached an agreement “in substance” on the text of an IGA have not yet completed implementing their internal procedures to bring the IGA “into force”.
The delay in enacting the requisite home-country laws to enforce FATCA reporting, recently caused the US Treasury to react with a harsh ultimatum in Announcement 2016-27. Countries which do not meet strict time deadlines will lose the “in effect” status of their IGA. This means that financial institutions within that particular foreign jurisdiction will no longer be exempt from FATCA’s 30% withholding on US-source payments made to the institution. Losing 30% on an investment is a tough pill to swallow.
Trinidad and Tobago — Bailing Out?
Trinidad and Tobago just acknowledged it does not have sufficient votes to adopt the necessary legislation in order to comply with FATCA. In order to adopt the needed legislation, a special 3/5th majority of its Parliamentary members is required, but this is currently lacking. Apparently, the opposition has refused to vote on the proposed bill. The Government indicated it is trying to resolve the matter by holding discussions with the opposition in an attempt to sway the opposition and get its vote. Trinidad and Tobago’s parliamentary session ends on September 22. The Government is pushing for passage of the legislation before that end-date that is a mere 2 days away.
Let’s see what happens in Trinidad and Tobago and keep updated on other jurisdictions that may be in a similar standstill. Watch this space for developments.
Follow me on Twitter: @VLJeker