Financial institutions required to share information with TAJ

Effective 17 August, financial institutions in Jamaica will be required to transmit relevant financial information to Tax Administration Jamaica (TAJ) on persons who reside permanently in the United States or persons who earn a substantial amount of their income from or within the United States.

For all subsequent years, the reporting date will be 31 May of each year.

According to The Jamaica Star, Finance and Planning Minister Dr. Peter Phillips said: “The Foreign Accounts Tax Compliance Act of the United States represents one such instrument and the agreement to give effect to this, which was signed by the Government of Jamaica and the US, has to be incorporated into our domestic legislation.”

The Foreign Account Tax Compliance Act (FATCA) is U.S. legislation which was signed into U.S. Law on 18 March 2010, as part of the U.S. Hiring Incentives to Restore Employment (HIRE) Act. The fundamental objective of FATCA is to identify those U.S. persons who may be evading tax through the use of offshore investment vehicles and to ensure that the Internal Revenue Service (IRS) can identify and collect the appropriate amount of tax from all US persons.

To ensure FATCA compliance for US citizens, many jurisdictions around the world have been bringing their own regulations up to speed, too, either by adopting similar measures or signing Intergovernmental Agreements (IGAs) with the US Treasury, thus instating FATCA as local legislation. IGAs have the added bonus of facilitating financial information exchange between governments.

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