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Panama Gets Ready for FATCA Compliance

Article Summary:

The IRS has announced it has made available a new online registration system for foreign banks as established in FATCA, which means Panama is on the verge of becoming compliant with FATCA reporting requirements.

Photo Credit: The Walpole

Original Article Text From Panama America via Google Translate :

Panama prepares agreement to comply with FATCA

The Ministry of Economy and Finance (MEF) is working in conjunction with an external consultant in order to prepare the strategy of negotiating a Model 1 Intergovernmental Agreement with the U.S. Treasury to implement the Act Account Tax Compliance Foreign (English, Foreign Accounts Tax Compliance Act or FATCA).

This law makes it harder to hide money outside the U.S. because banks must report their accounts to the Internal Revenue Service (IRS, for its acronym in English) or otherwise exposed to having to pay a withholding tax which in some cases is 30%.

Arturo Carvajal, a partner at KPMG, said yesterday during the presentation of the impact this legislation will have on the financial market in the month of August Bancaforo that Model 1 is a mutual intergovernmental agreement where for example the government of Panama U.S. to provide all available information about an account involving a U.S. citizen or transactions that may produce interest or dividends from sources within the United States.

On the intergovernmental agreement (IGA for its acronym in English) Model 1 were incorporated from the 2012 United Kingdom, Mexico, Denmark, and this year Ireland, Norway, Germany and Spain. They are also in negotiations to sign the agreement IGA, France, Italy, Canada, Korea, Argentina, Sweden, Belgium, among others.

Panama is in the list of countries considering signing, along with Brazil, Colombia, Costa Rica, Chile, Bermuda, Russia, etc..

Carvajal said FATCA means exchange of information, and the entire financial system will be affected by this rule.

Bloomberg news agency reported that the Cayman Islands, known for being a tax haven for wealthy Americans seeking to save money abroad without government control of the U.S. are about to be less secret, as they welcome the agreement between countries to comply with FATCA.

“The Cayman traditionally been seen as a jurisdiction secret, as was Switzerland,” said Dennis Brager, IRS former lawyer who now runs Brager Tax Law Group APC Los Angeles, in an interview held on August 15, the day after the agreement was announced. From there dozens of banks conducting operations, funds and wealth management entities, according to Bloomberg.

Link to Original Article:

From Panama America

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