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Premier Smith on FATCA: ‘This is nothing about selling out anything’
With emphasis Premier Smith said, “Contrary to some opinions signing an inter-governmental agreement with any stage on FATCA has not compromised the individual in the BVI and it has indeed provided the mechanism that allows the financial institutions in the BVI to report in a very simplified way to the United States. It has also given the US taxpayers in the BVI the time and mechanisms at which they can correct any outstanding reporting concerns that they may have had.”
“And also contrary to what was claimed this is not about selling out anything, I said this before and I’ll say it again, we are merely doing what a responsible government should do,” stated Premier Smith.
He said that FATCA is a USA federal law that is universal and requires persons residing outside of the USA that are US citizens to report among other things their income to the USA government. “The signing to the FATCA intergovernmental agreement (IGA) is universal,” noted the Premier.
He said that the IGAs are in place to lessen the burden of reporting and the costs associated with citizens and financial institutions. “By entering into an inter-governmental arrangement with the government of the United States the BVI and all the many countries around the world that has done so have simplified the requirements to comply with FATCA for the financial institutions within their borders,” said Premier Smith.
He further said that they have essentially prevented an automatic 30% withholding tax from being applied to the various institutions if they were not compliant.
However, delivering at a lecture at the H. Lavity Stoutt Community College in February 27, 2014, Managing Director and Chief Executive Officer (CEO) of the BVI Financial Services Commission Mr Robert Mathavious said that while the Territory will not be sheltering any Virgin Islander who might also have US citizenship from their tax obligations in the US, the FATCA will be a compliance burden on the Territory’s institutions.
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16 Responses to “Premier Smith on FATCA: ‘This is nothing about selling out anything’”
The consequence of not entering into an inter-governmental agreement with the US could be extremely damaging to the BVI's economy, as the US may decide to refrain from doing any business with us. Additionally, they may implement stiffer penalties that will discourage current and future investors from investing or having any financial dealings in the BVI.
Therefore people, such agreements - as signed by the government - may be the most effective option going forward, and may have the lowest impact on our already challenged Financial Services.
I am also one who believes that if you are enjoying the benefits of being a US Citizen, then you should be just a obligated to the necessary tax obligations that affords such benefits. Now, the truth can be considered offensive, but it's not a sin.
It appears the government were not aware that they could have also negotiated these similiar terms for thier citizens before pressing forward with FATCA. Forget about the institutions for a second and remember the living breathing individuals who put money into these same institutions, and who can decide at anytime to place there money elsewhere outside the jurisdiction. What happend to a negotiation on our behalf?
Although there is a foreign earned income exemption threshold, what happens to those persons with ambitions to earn beyond that limit set. We would be forced to pay taxes in two juridictions or to make a hard decision to relinquish our US citizenship, for which we are proud to hold because that is where we were born and have emotional ties to for other reasons.
This is really a sad day.
I am disappointed that we do not have the right leadership to get things done.
If you are born in a country they can never say this is not your home.
Await the ripple effect of the economy and then post your comments again.
If we had joined forces with other jurisdictions we would have had a stronger voice. A country should never feel that they were pushed into a corner and cannot defend themselves.
I am a Dreamer because I had such high hopes for this country.