It will not be business as usual for Barbadians who have thousands of dollars deposited in American banks. BARBADOS BUSINESS AUTHORITY confirmed that in exchange for information it wants on its citizens who have more than US$50 000 on “despository accounts” here, the United States (US) has agreed to share similar information it has on Barbadians.
And while reliable sources revealed that the “reciprocal arrangement” scheduled to take effect next year would cover Barbadians living here and in the United States, Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss is assuring Barbadians “there is no witch hunt!”.
Last month, Inniss and US Amabassador to Barbados Larry Palmer signed an Inter-Governmental Agreement (IGA) “to improve international tax compliance” and implement the controversial US’ Foreign Account Tax Compliance Act next year.
“The government of the United States of America collects information regarding certain accounts maintained by US financial institutions held by residents of Barbados and is committed to exchanging such information with the Government of Barbados and pursuing equivalent levels of exchange, provided that the appropriate safeguards and infrastructure for an effective exchange relationship are in place,” the agreement stated.
Under Article 2 of the accord the US said that “with respect to each Barbados reportable account of each reporting US financial institution” it would give Barbados authorities “the name, address, and Barbados taxpayer identifying number of any person that is a resident of Barbados and is an account holder of the account; the account number (or the functional equivalent in the absence of an account number; the name and identifying number of the reporting US financial institution; the gross amount of interest paid on a depository account; the gross amount of US source dividends paid or credited to the account; and the gross amount of other US source income paid or credited to the account”.
Through the Barbados Revenue Authority, Barbados will remit similar information on Americans with accounts here to US Internal Revenue Service.
This was confirmed by Inniss, who told BARBADOS BUSINESS AUTHORITY: “From our end under the reciprocal Inter Governmental Agreement the US would report to us on applicable Bajans with relevant assets in the USA and Barbados will report on Americans with applicable assets in Barbados.”
“Rest assured there is no witch hunt. The financial institutions are aware of their duties as well as the competent authorities on either side.”
Under the IGA, the two “competent authorities” – in Barbados’ case the Minister of Finance or his “authorised representative” and for the US the Secretary of the Treasury or “his delegate” – have to notify each other once satisfied that the other party had “appropriate safeguards to ensure that the information received pursuant to this agreement shall remain confidential and be used solely for tax purposes”, and “the infrastructure for an effective exchange relationship, including established processes for ensuring timely, accurate, and confidential information exchanges, effective and reliable communications, and demonstrated capabilities to promptly resolve questions and concerns”.
Both authorities are also to meet before September next year “to establish that each jurisdiction has such safeguards and infrastructure in place”.
