Bahamas Releases Proposed FATCA Legislation & Guidance Notes For Industry Consultation

The Bahamas Ministry of Financial Services released draft copies of the FATCA Legislation and the FATCA Guidance Notes to meet the International Tax Compliance Requirements of the Model 1 FATCA Intergovernmental Agreement (IGA) between the Bahamas and the United States of America (US).

The new FATCA Bill was drafted in order to give powers to the Competent Authority who will be responsible for reporting to the US government and to facilitate the Automatic Exchange of Information (AEOI) process under the FATCA IGA.

The Bahamas Guidance Notes have been drafted by EY following consultation with representatives from the financial services industry including the Ministry of Financial Services, the Ministry of Finance and the private sector FATCA Working Group. The purpose of the Guidance Notes is to provide practical assistance to industry practioners identified as Foreign Financial Institutions (FFIs) in the Bahamas in interpreting their obligations under the IGA.

The draft FATCA legislation and the draft FATCA Guidance Notes will together form key components of the Bahamas’ AEOI reporting regime in assisting industry practitioners with readying themselves to comply with FATCA obligations in accordance with Bahamian law.

The Bahamas government in partnership with EY and Convey (a leading tax software provider), the team engaged to design and deploy The Bahamas’ FATCA solution, are scheduled to release the FATCA solution to the financial services industry by the end of June. The solution, which will follow the published IRS schema, is intended to safely manage and facilitate the ease of reporting requirements to the US government through the transmittal of information from the Bahamas Competent Authority to the IRS under the IGA.

Financial Services in the Bahamas has long been a component that makes up the fabric of our Bahamian economy with a long unmatched history in the Caribbean as the leaders in providing financial services. The Bahamas government has worked hard in conjunction with industry practioners to develop a strong reputation for its leadership in international financial sector issues and will continue to strive to remain at the forefront of complying with international best practices and regulatory standards.