Bermuda is another country that decided to negotiate and sign a Bermuda FATCA (Foreign Account Tax Compliance Act) based on Model II intergovernmental agreement. This is the latest FATCA development announced in March 2013 that has a profound impact on Americans living abroad in Bermuda or American expatriates with offshore banking accounts or other foreign financial accounts in Bermuda.
American expatriates in Bermuda must realize that the world of undisclosed offshore banking accounts is getting smaller and smaller as the U.S.A. actively signs the Bermuda FATCA (Foreign Account Tax Compliance Act) and other FATCA agreements with multiple countries across the globe.
“The US Treasury welcomes this decision by the Government of Bermuda to sign one of the Model Foreign Account Transaction Compliance Act (Bermuda FATCA) Intergovernmental Agreements, ” mentioned US Treasury official Mark Mazur.
“In short, Bermuda is doing its part to discourage anyone who comes to a misguided conclusion that they can use Bermuda to engage in breaking the tax laws (Bermuda FATCA laws or other types of tax laws) of other countries and get away with it,” said Minister Richards.
Bermuda plans to sign a similar agreement with the United Kingdom in the framework of Bermuda FATCA. Moreover, Bermuda does not require a reciprocal receipt of Bermuda FATCA-type information from other countries like the USA and the UK. Additionally, Bermuda does not have the laws that require a bank customer’s approval before their information is shared with the IRS. This situation is different from most European countries that are particularly interested in reciprocal FATCA-data sharing agreements.
Moreover, the Government of Bermuda will utilize its Tax Information Exchange Agreement (TIEA) in case of group requests for the IRS and UK authorities as a part of global FATCA investigation.
Also Bermuda plans to sign a Bermuda FATCA agreement based on IGA Model 2 with the G5 initiative that will be based on multilateral automatic exchange agreements too.
Minister Richards concluded his speech by saying that “there has been much talk recently about the G8 gold standard on the Beneficial Ownership objective of the Financial Action Task Force (FATF). Bermuda is fully committed to this. As you know Bermuda for decades has required companies setting up shop in Bermuda to file beneficial ownership information with the Bermuda Monetary Authority (most of our peer jurisdictions have not caught up in this area) and we have recently passed legislation to license all Corporate Service Providers (CSPs) in Bermuda and bring them under the umbrella of the Proceeds of Crime Act that imposes the FATF standard on beneficial ownership. Therefore Bermuda is already on record as being committed to this objective through the work of our National Anti-money Laundering Committee (NAMLC).”
Conclusion
The day of Bermuda FATCA implementation is approaching fast. American expatriates are advised to review their offshore banking accounts and other financial holdings to determine the FBARs and FATCA filing requirements. A failure to comply might result in civil penalties and criminal prosecution. International tax experts at Artio Partners are here to help you with US expat tax preparation, FATCA requirements and other expat tax services. To learn more, please click here.