ST. GEORGE’S, GRENADA: 12th October, 2017. The Inland Revenue Division (IRD) of the Ministry of Finance and Energy has completed a series of training for its staff and representatives of Grenada’s Financial Institutions (FIs) in preparation for the implementation of United States of America – Grenada Foreign Account Tax Compliance Act (FATCA), 2017.
FATCA is an IRS compliance measure geared towards combating tax evasion by US taxpayers holding assets in non-US financial accounts and institutions.
The IRD is the competent authority responsible for facilitating this process. The Inter-Government Agreement between the US and Grenada was signed in November 2016 and the Legislation for its enforcement, on 29th September 2017 by Minister of Finance, Dr. the Rt. Hon. Keith Mitchell.
FATCA requires Financial Institutions (FIs) to perform the following through the competent authority (IRD):
- Report to the US Internal Revenue Service (IRS) information on assets of US$50,000.00 held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold substantial (greater than 10%) ownership interest
- Review Pre-existing Individual Accounts as of June 30, 2014, that exceeds US$50,000 (US$250,000 for a Cash Value Insurance Contract or Annuity Contract), and
- Conduct enhanced review procedures for pre-existing individual accounts that exceeds US$1.0M as of 30 June 2014
Failure of a FI to comply can result in 30% Withholding Tax and the possible loss of correspondent banking relationship with the United States.
The training includes the use of the electronic platform for reporting by the Financial Institutions and the review of obligations for both the IRD and the Reporting Financial Institutions.
The (FIs) included banks, funds, insurance companies, trusts, private equity companies and special purpose entities.