The Foreign Account Tax Compliance Act (FATCA) should not be seen as a burden but as a move in the right direction that could make the island even more competitive.
This piece of advice came from Carol Nicholls, managing partner and partner of advisory services at KPMG, who told BARBADOS BUSINESS AUTHORITY that she believed Barbados had nothing to worry about since it was already perceived by the international business community as one of the least corrupt jurisdictions.
Her comments came as this month the United States Department of the Treasury announced a six-month extension – to July 1, 2014 – for the start of the FATCA withholding and account due diligence requirements to allow more time to complete agreements with foreign jurisdictions.
Enacted by Congress in 2010, FATCA targets non-compliance by United States taxpayers using foreign accounts and “establishes a global approach to combating offshore tax evasion”, according to the Treasury Department.
Nicholls said it was simply a move towards greater transparency, adding that KPMG saw FATCA as “an opportunity for international corporations to be more competitive globally”.
“What we are seeing more and more is that we are going from having a formal agreement with individual countries wanting access to information to one of having the information readily available on a continuous basis and FATCA is just another step to having constant transparency and it just happened to emanate out of the United States,” said Nicholls.
“I think transparency is important and if you want to maintain the pristine reputation of an international business jurisdiction you need to cooperate and understand the need for these structures . . . . That is the move worldwide that is the trend we are seeing and I think we need to educate our clients as to what the trend is,” said Nicholls.
“If you believe in tax moralities and tax structures that are fiscally and socially responsible then the issue of transparency should not pose a problem. If the culture and tone at the top is right then you shouldn’t have a problem with the transparency. And I believe that that will prevent jurisdictions from being listed whether you call it a blacklist or otherwise,” added Nicholls.
In April of this year Minister of Finance Christopher Sinckler expressed concern that FATCA would place pressure on the financial services sector in the area of information reporting. (MM)
