On 19th August 2016 Trinidad and Tobago’s Honourable Finance Minister Colm Imbert signed a Model 1 Inter-Governmental Agreement (IGA) with the United States of America.
The IGA is designed to improve international tax compliance through mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information between both countries.
Pursuant to the IGA, financial accounts maintained by U.S. persons in T&T’s financial institutions will be automatically reported to the Board of Inland Revenue (BIR). The BIR will then send that information to the Internal Revenue Service (IRS) in the U.S. Reciprocally, the IRS will also provide the BIR with information pertaining to the financial accounts of T&T persons using U.S. financial institutions.
T&T and the U.S. will now move to bring the IGA into force. This will allow for the automatic exchange of information between both countries and also ensure that foreign financial institutions, including local banks and insurance companies, will not be subjected to a thirty percent withholding tax for non compliance.
“To bring the IGA into force, the Minister of Finance will take to the Parliament the necessary legislation, among other things, to provide for the automatic exchange of information by the Board of Inland Revenue to the United States Inland Revenue Service,” the Ministry of Finance stated.
FATCA was enacted in 2010 and is part of U.S. federal Law that requires foreign financial institutions (FFIs) to report information about financial accounts held by US citizens and residents to the IRS.
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