(Jamaica Gleaner) Effective August 17, financial institutions in Jamaica will be required to transmit relevant financial information to Tax Administration Jamaica (TAJ) – the competent authority – on persons who reside permanently in the United States (US) or persons who earn a substantial amount of their income from or within the United States.
TAJ shall be obliged to submit the information received from local financial institutions to the Internal Revenue Service (IRS) in the US.
However, for all subsequent years, the reporting date for the competent authority will be May 31 of each year.
This development comes in the wake of the passage on Tuesday of the Revenue Administration (Amendment) Act with two amendments.
The bill was piloted by Finance and Planning Minister Dr Peter Phillips.
The bill, which received support from both the Government and Opposition in the House of Representatives, gives legislative effect to an agreement signed by the US and Jamaican authorities in May 2014 as part of the Foreign Accounts Tax Compliance Act (FATCA).
According to Phillips, under the model agreement between both countries, financial institutions will be required to report specified financial account information on US persons who hold financial accounts with local institutions.
The FATCA agreement provides a framework for automatic exchange of financial account information to be used in tax compliance and the non-compliance of which attracts a penalty for American citizens or persons who reside in the US or who earn a substantial part of their income from and within the US.
FATCA, which was introduced in 2010, is a system of reporting for foreign financial institutions in respect of their financial accounts held by US taxpayers or US persons. The US law is intended to combat offshore tax evasion by US taxpayers.