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New US tax law – FATCA – “very ambitious,” says US Embassy official

Joseph Boski, Political and Economic Section Chief at the U.S. Embassy in Belmopan, Belize, told Amandala today that the Foreign Account Tax Compliance Act (FATCA), which will see its full implementation in 2014, was put into place to ensure better tax compliance.

“The principle is pretty clear,” said Boski. “The FATCA law addresses tax compliance.”

The FATCA applies also to Belizeans with dual US nationality, as well as “green card” holders and US nationals living in Belize or any person in those categories who have financial interest in Belize, including offshore bank accounts.

Boski said the FATCA is “very ambitious” and he hopes it will be very effective, as well.

He notes that anyone who is paying US taxes or should be paying those taxes and who has financial assets overseas should double-check whether they need to report financial assets overseas. This, he said, especially applies to US citizens or financial institutions overseas doing business with US citizens located either overseas or in the US.

The US Embassy officer said that if there is an American with assets in Belize who is liable to pay taxes but is not, and the financial institutions, such as banks, are aware, then they are asked to assist the United States Internal Revenue Service (IRS) in identifying this tax evasion.

Non-compliance could result in a 30% withholding tax being levied on the person of interest.

Boski said he hopes the FATCA would serve as a model for all countries seeking tax compliance from citizens living overseas or who have assets overseas.

“I think you know, in order to get it to work, private banks have to actively engage with the process,” said Boski.

He said that some of the provisions of FATCA are already in effect, and the IRS has agreements already with some countries and banking institutions.

A Belize banker has told us that they would be signing up with the IRS online portal when it opens up on July 15. (See story, “Belize Banks brace for implementation of far-reaching US tax law”, appearing on page 2 of the Wednesday, May 15, 2013 edition of Amandala.)

Boski shares the following links for those who want further information:

http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)

http://www.treasury.gov/press-center/press-releases/Pages/tg1759.aspx

http://travel.state.gov/travel/living/living_1234.html

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