On August 19, Trinidad and Tobago and the United States have signed an Inter-Governmental Agreement (IGA) as part of the implementation of the Foreign Account Tax Compliance Act (FATCA).
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010 and were enacted by US Congress to target non-compliance by US taxpayers using foreign accounts or foreign entities. The US government entered into a number of bilateral intergovernmental agreements (IGAs) that set the groundwork for cooperation between the jurisdictions in this area.
The IGA Model 1A was signed by Trinidad and Tobago's Finance Minister Colm Imbert and US Ambassador John Estrada. The signing brings to an end about three years of negotiations between the countries on the Agreement.
In a statement, Colm Imbert described the signing of the IGA as “another milestone in the relationship between both countries on tax matters.” “The signing is also timely as it was completed before September 30 deadline set for the exchanging of information between both countries,” he said.
Trinidad and Tobago now needs to complete its necessary internal procedures before bringing the agreement into force. Once the agreement enters into force, it would allow for the automatic exchange of information between the two countries. It will also ensure that the foreign financial institutions, including local banks and insurance companies, will not be subject to a 30 percent withholding tax.
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