As the region gets ready to start complying with the US law FATCA, OECD countries are already working on a Single Global Standard for automatic exchange of information.
FATCA could now be joined by the European OECD countries Single Global Standard for Automatic Clearing of CRS Information (Gatca), "... allowing tax information on their residents to be shared between them."
An announcement has been made that transition to compliance by financial institutions with the conditions established by law will be carried over to the years 2014 and 2015.
The Treasury Department of the United States, through the inland revenue service (IRS) has announced that it will take into account the "good faith" of financial institutions outside the United States who will have to make adaptations in order to comply with the law and will not issue penalties for delays between 2014 and 2015.
The president of the central bank said that this would prevent Guatemala from being regarded internationally as a tax haven.
This was explained by Edgar Barquín, president of the Bank of Guatemala (Banguat). He added that approval next year in the U.S. of the Foreign Account Tax Compliance Act (Facta) will be incompatible with Guatemala where there is no law to release bank secrecy.
The fulfillment of the obligation to report on foreign bank accounts belonging to U.S. citizens has been postponed to July 1, 2014.
This was announced by the U.S. Treasury through a statement, explaining that "due to the huge interest from countries around the world" the deadline to comply with the Law on Foreign Account Tax Compliance (FATCA), will be extend by six months, that is until July 1, 2014.
Government to government agreements simplify compliance with the rule that seeks transparency in the finances of U.S. citizens abroad.
Elfinancierocr.com reports that "the Foreign Account Compliance Act (FATCA) is a reality and the truth is that to date, there are very few financial institutions in our region who are prepared to meet the requirements of this U.S.
From January 2013 financial institutions outside the U.S. will have to report on the accounts of citizens from that country, for tax purposes.
An analysis of the issue in an article in Capital.com focuses on Panama and risk management, but can be extrapolated to the entire Central American region.
“January 1 2013 will see the start of registration of agreements for compliance with FATCA for all entities in the financial sector, including insurance companies, brokerage houses, banks, credit unions and mutual funds that have U.S. customers, who must act accordingly. '
How insurers are affected by the new regime requiring reports to the U.S. government from foreign financial institutions.
An article in Martesfinanciero.com reports that in Panama, "those involved in the sector are awaiting the outcome of an agreement between Panama and the U.S., so as to 'adhere to a regulation that has not been signed yet", says Dino Mon, vice president of Mapfre Panama. "
There is still uncertainty among U.S. citizens and companies abroad, regarding the effects of this law’s extraterritorial reach.
The start of registration stipulated by FATCA law (Foreign Account Tax Compliance Act) of the United States is January 1st, 2013, with enforcement beginning on 1st July of that year. However, many questions remain in several sectors such as insurance, securities and pensions, and even the regulators don’t have a clear idea of the effects of the law.
Legally registered companies must also report to the tax authorities of the U.S.
This new measure will be taken to comply with the Foreign Account Tax Compliance Law (FATCA, for short), which requires information disclosure by companies where a U.S. citizen is involved.
In addition, banks who hold deposits belonging to North American clients must also report to the Internal Revenue Service (IRS), and entities that do not will be subject to a retention of 30% on the interest and dividends generated.
Financial companies must provide reports about their clients who are United States citizens under penalty of withholding 30% of the transfers that they make from that country.
The measure, which will apply from July 2013, is a consequence of the Law on Foreign Account Tax Compliance (FATCA), which requires foreign banks to sign an agreement with the Internal Revenue Service (IRS), and report this to their customers, U.S.