Press releases

FATCA/CRS

Curaçao

Financial institutions are currently faced with new legislation to allow the international exchange of information. Governments thus want to gain more insight into their residents’ data, particularly relating to income earned abroad. 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. Curaçao has already taken steps to meet the US FATCA obligation. This includes the conclusion of an Intergovernmental Agreement Model I (IGA I) with the United States on December 16, 2014 and adapting the local legislation to enable the exchange of information.

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 are forced to identify their foreign customers, too, and check in which country they are liable for taxes.

On the back of this, Curaçao and the Netherlands have concluded a Memorandum of Understanding (MoU) about the exchange of information in OECD and EU related tax cases. One of the stipulations in the MoU designates categories of income for which automatic exchange of information will become mandatory. This specifically applies to income from immovable property, dividends, interest, income from self-employed work, salaries, wages and other - similar - remunerations from work, directors' remunerations and other - similar - payments, income earned by artists and sports people, pensions, annuities, social security benefits and other - similar - incentives, payments to students for their education and training, other income, as well as migration data. The MoU provides Curaçao with the resources needed to comply with the agreements as part of the CRS framework, according to which the automatic information exchange process has been designed. What’s more, the MoU facilitates Curaçao’s role as “Early Adopter” of the CRS, to agree with the Netherlands on the automatic exchange of information. This MoU became effective on September 18, 2015.

Curaçao has also signed a Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (MCAA), relating to the provision of CRS information.

The CRS regulations will become effective in 2016 and institutions will have to report on 2016 data by mid-September 2017.

Both the FATCA and the CRS will affect issues like the 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 risks.

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