(Trinidad Guardian) Government is getting some breathing room to pass the Foreign Account Tax Compliance Act (FATCA), as it now has until February 2017 to pass the legislation to make this country FATCA compliant.
US Ambassador John Estrada, who is currently in Washington, said yesterday that the United States is now strongly recommending that this country “pass legislation no later than February 2017, in order to carry out the commitments undertaken when the FATCA agreement was signed by our two countries, and in line with the implementation plan put forward by the Government of Trinidad and Tobago.”
He, however, made no mention of the word “extension” in the brief notification.
Government and the Opposition have been blaming each other for failure to pass the legislation, which Government and the business community argued needed to be passed by September 30 to prevent fallout. The business community had also warned of fallout if the legislation was not passed and up to Thursday issued a statement calling on both sides to put their differences aside and pass the legislation in the interest of the country.
Noting the Opposition’s lack of support for the legislation at a media conference on Tuesday, Prime Minister Dr Keith Rowley said in an effort to stave off any fallout, the Government had asked the US Treasury Department for an extension. If this country failed to get an extension, he said, then the 30 per cent withholding tax would take effect as “the Government would have no call on that.”
But the T&T Guardian reported exclusively on Wednesday that the US Internal Revenue Service (IRS) had indicated in a notice since August that the process for evaluating which territories were still considered to have an Inter-Governmental Agreement (IGA) would come into effect on January 1, 2017.
All territories will thus be required to advise the IRS why they had failed to put the IGA into force by September 30, 2016, and indicate a plan and timeframe for doing so by December 31, which the T&T Guardian understands Government has already done. This was confirmed by Estrada, who on Monday said Government had submitted “to the Treasury a detailed explanation and step-by-step plan that Trinidad & Tobago intends to follow to bring the FATCA agreement into force.”
The IRS notice made it clear that a jurisdiction would not cease to be treated as having an IGA in effect until at least 60 days after the jurisdiction’s status on the IGA list is updated, which effectively gives countries until early March 2017.
When questioned about the 2017 deadline on Tuesday, Rowley said, “It means that there are milestones that you have to meet and you will be gambling and walking on fig skins if you don’t meet one milestone and hope to meet the other one later.”
Opposition Leader Kamla Persad-Bissessar has been repeating that there would be no major fallout if the September 30 deadline was not met.
Government had also said it had asked the US for an extension to pass the legislation, but financial analyst Ian Narine had told the T&T Guardian it was clear from the IRS notice that there was no need for an extension given the timelines outlined in the IRS document.
Contacted yesterday, Narine said that “we now have a timetable that is before us, and we should work towards it.”
Former Bankers’ body boss unhappy
Contacted on the new scenario yesterday, former Bankers Association president Nigel Baptiste said he was still not sure September 30 was not the deadline date which needed to be met. However, he admitted he was not satisfied with the manner in which the FATCA legislation was being handled.
In an emailed response, Baptiste said: “Without understanding the context of the Ambassador’s statement, it is impossible to determine whether that date (February 2017) represents the end date of the process identified in the IRS statement or another date altogether.
“What I can say, however, is that it must be unacceptable for a country such as Trinidad and Tobago with ambitions to be the financial centre of the Caribbean to demonstrate such a reckless disregard for globally agreed deadlines.”
Baptiste said this “country seems to be attracted to flirting with disaster as is/was evidenced with the FATF and AML/KYC/POCA legislation.”
He said: “Avoiding sanction by the IRS is important, and no doubt once that is avoided, many will claim a pyrrhic victory ignorant of the forgone opportunities and damage to the country’s reputation.”
