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- GEORGE’S, Grenada, March 29, 2017 (CMC) – The Grenada parliament has given the green light to the controversial Foreign Account Tax Compliance Act Inter-Governmental Agreement (FATCA) with the United States.
The FATCA legislation demands that foreign banks provide information to America’s Internal Revenue Service (IRS) on any customer deemed a “US person”, if they have more than US$50,000.
Washington has said that the legislation aims to crack down on tax dodgers, who hide hundreds of millions of US dollars in offshore accounts, annually, in an effort to avoid paying taxes.
Unlike other Caribbean countries, the Grenada government controls all 15 seats in the House of assembly and the legislation received easy passage with little or no debate.
It now goes before the Senate in April, where the debate is likely to be a bit more intense, given the interest groups represented in the Upper House.
According to the FACTA legislation, the Comptroller of Inland Revenue has been declared the competent authority with whom the IRS shall have direct communications when it comes to seeking information.
As the Competent Authority, the Comptroller will mandate his/her staff to gather information from financial institutions.
“Failure to comply with such a request is a summary offence, punishable by a fine not exceeding EC$100,000.00,” according to the legislation titled “United States of America—Grenada Foreign Account Tax Compliance Act, 2017”.
Where a financial institution provides inaccurate information in response to such a request, on conviction of the summary offence, it faces a fixed penalty of EC$50,000, or a fine not exceeding EC$300,000.
“A person, who discloses or divulges any information or produces any document in contravention of this section, commits an offence and is liable, on summary conviction, to a fine of not exceeding EC$5,000 or to imprisonment for a term not exceeding one year,” according to the legislation.
The legislation, once approved, will be applied, retroactively, covering the years 2014, 2015 and 2016.
