I had earlier blogged about the impasse in the Trinidad & Tobago government to reach agreement on legislation to implement the provisions of the Foreign Account Tax Compliance Act (FATCA).
Readers shall remember that a country could have signed an Intergovernmental Agreement (IGA) with the United States to enforce 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 prompted the US Treasury to react with a harsh ultimatum in Announcement 2016-27. In a nutshell, countries which do not meet strict time deadlines will lose the “in effect” status of their IGA. This means that the country’s financial institutions will no longer be exempt from FATCA’s 30% withholding on US-source payments. Losing 30% on an investment is a tough pill to swallow.
According to Announcement 2016-27, on January 1, 2017, Treasury will begin updating the IGA List to provide that certain jurisdictions that have not brought their IGA into force will no longer be treated as if they have an IGA in effect. Trinidad and Tobago is worried about its continued status on that List.
In September, Trinidad and Tobago acknowledged it did not have sufficient votes to adopt the necessary legislation in order to comply with FATCA, due to an impasse in its Parliament. In order to adopt the needed legislation, a special 3/5th majority of its Parliamentary members is required. This majority was lacking back in September and apparently, the FATCA drama continues.
The Opposition has insisted that the FATCA legislation be sent to a joint select committee (JSC) of Parliament over its concerns that the legislation is overreaching and violates certain fundamental rights. Trinidad & Tobago Finance Minister Colm Imbert opposed this demand, but just yesterday it was reported the government caved in to the pressure. The JSC must return to Parliament in 3 weeks for a final vote.
Finance Minister Colm Imbert told legislators that the Opposition leader had written to the Prime Minister suggesting that he write to US president-elect Donald Trump to ask about the incoming administration’s “intention with respect to the FATCA legislation.” Imbert was appalled at this suggestion. He said: “[Did] you ever hear more absurdity Madam Speaker? We must write Donald Trump and ask him if he is going to repeal FACTA[?]. That is not how it works. This is a law passed by Congress, by the Republican Senate…This is a law passed by them. The Republicans control the Senate and the Congress Madam Speaker but we must write Donald Trump and ask him if he going to repeal FATCA. …You really think that the President (elect) of the United States has time with this[?]. What they have time with is to see whether we are going to be compliant, whether Trinidad and Tobago is a serious country,” Imbert added.
Obviously FATCA tensions are running very high in the island paradise, so much so that the FATCA facts have apparently become muddied. FATCA was passed on party lines: It narrowly passed the House, with no Republican members voting “yes” and passed the Senate with only one Democrat member voting “no”. President Obama (D) signed the bill into law. More details here.Back to Articles Back to Virginia La Torre Jeker J.D.
The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.
Virginia La Torre Jeker J.D.
Virginia La Torre Jeker J.D., is based in Dubai. Virginia has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has over 30 years of experience specializing in the international aspects of US tax, including FATCA. She has been quoted in the New York Times and Newsweek, and is regularly quoted in many local news articles and publications."
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