Tax Newsflash | FATCA | AUA | Deloitte in the Dutch Caribbean has been added to your bookmarks.
The worldwide trend to introduce a system of automatic exchange of information is on the rise. As a result financial institutions face new legislation to effectively implement this. Governments thus want to gain more insight into their residents’ income information so they can combat tax evasion. The United States has already introduced the Foreign Account Tax Compliance Act (FATCA). This legislation forces financial institutions across the globe to identify their US customers and to report specific data to the tax authorities. Although Aruba has started negotiations with the US to reach an agreement on having financial institutions exchange information about US nationals, such agreement with the US has not materialized as of yet. In order to meet with their FATCA obligation, financial institutions in Aruba will have to directly provide the US Internal Revenue Service (IRS) with information. The US deadline for providing information over the year 2014 expired on June 29, 2015.
The G20 nations have requested the Organization for Economic Cooperation and Development (OECD) to prepare the Common Reporting Standards (CRS). Similar to the FATCA, under the CRS financial institutions need to identify their foreign customers.
Aruba has signed a Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (MCAA). Based on the MCAA Aruba will be exchanging CRS data as from the tax year 2017 (delivery 2018).
Both the FATCA and the CRS will affect matters like the internal policy, customer identification processes and systems, customer management, and reporting by financial institutions.
Deloitte Dutch Caribbean has an international network of experts who have extensive experience in assisting financial institutions, including private equity funds, property funds, banks, portfolio managers, and insurers, on FATCA and CRS issues. The FATCA/CRS teams comprise experts on taxation, Anti-Money Laundering (AML)/Customer Due Diligence (CDD), compliance and risk.