Gov’t creates FATCA reporting system
The Virgin Islands government has created an Internet-based reporting system to help the territory’s banks, trust companies and other financial institutions comply with their obligations under a United States tax law.
The system, called the BVI Financial Account Reporting System, will allow VI firms to pass along information about their clients with US accounts to the VI government, according to a press release issued April 15 by Government Information Services.
As part of an agreement between the two governments, the information will then be transferred en masse to American tax authorities, allowing the firms to comply with the US Foreign Account Tax Compliance Act.
Under FATCA, non-US financial institutions will have to determine which of their clients with accounts over $50,000 have ties to the US and forward that information to the country’s tax authority, the Internal Revenue Service.
Institutions that don’t follow the rules will be deemed “non-compliant” and incur a 30 percent withholding penalty on the value of the account.
Unlike most other countries,the US government calculates itsnationals’ tax burden based ontheir worldwide income.
Manytaxpayers with overseas accountshaven’t always declared them to the IRS, which was often unaware of their existence.
