What is FATCA? FATCA abbreviates the Foreign Account Tax Compliance Act. It was signed into law in the U.S on March 18, 2010, by President Obama, under H.R. 2847 as the Hiring Incentives to Restore Employment Act (HIRE Act of 2010). Specifically, Section 511 of the HIRE Act created FATCA, thereby creating IRC Section 6038D of the U.S Tax Code.
- FATCA became effective in Jamaica on July 1, 2014.
- FATCA aims to identify US Persons trying to avoid U.S. tax obligations by holding financial and other assets in offshore accounts.
- FATCA requires reporting to the IRS regarding certain offshore financial and other assets held by US Persons, if those assets meet certain regulatory thresholds.
What is FBAR? FBAR abbreviates the Foreign Bank Account Report.
Every US Person who has one or more foreign bank account(s) which, at any point during the year, reached an aggregate balance of over US$10,000 is obliged to file the FBAR form with the US Treasury Department, listing all foreign bank accounts.
Who qualifies as a US Person? A U.S. Person means (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.
How are members of the Jamaican Diaspora affected by FATCA? If you are a member of the Jamaican Diaspora, and you are a citizen or resident of the United States who owns any form of financial assets outside of the United States, you may have a FATCA filing requirement.
What qualifies as Offshore Financial Assets? Some examples of Offshore Financial Assets include, but not limited to:
- Bank Accounts (whether owned or possess only signatory authority);
- Real Estate;
- Investments in Stocks, Bonds, Equity-Linked Insurance Products, etc.;
- Equity Interest in a local Partnership, Company, or Other Business;
Penalties for Failure to Comply: There are very stiff penalties (including prison time) for failure to comply with the FATCA and FBAR filing requirements.
For further information regarding the filing requirements for FATCA and FBAR, you may contact us as noted below:
Trevor H. Francis, B.Sc. (Hons.), M.Sc. (Hons.), CLU, CPA, FCA
Partner
Jamaica Office:
15B Braemar Avenue
Kingston 10, JA, W.I.
Phone (Direct Line): (876) 407-4168
Phone (Office Lines) (876) 633-0104 or (876) 632-6931
Fax: (866) 646-5810
Email Address: info@fiacg.com
