BRIDGETOWN, Barbados – Regional investment and financial firms expecting the new United States president Donald Trump to reverse the Foreign Account Tax Compliant Act (FATCA) can forget it.

 

Deloitte’s Global FATCA leader on its foreign account tax compliance initiative, Denise Hintzke, dismissed speculation that Trump would repeal the law, which promotes cross border tax compliance by implementing an international standard for the automatic exchange of information related to US taxpayers.

 

The law, enacted in 2010 by the US Congress, requires foreign financial institutions to report to the US Internal Revenue Service on financial accounts held by American taxpayers, or by foreign companies in which US taxpayers hold a controlling interest.

 

Hintzke said in light of some of the changes Trump has been making to US laws there were “all kinds of rumours” in the region regarding the future of FACTA.

 

She explained that the freeze the president placed on regulations on the day of his inauguration did not apply to the tax compliance regulation.

 

“I just want to tell you that is not something that he can technically do. This is a statutory law. It would take an act of Congress to actually repeal it. He cannot do that by executive order. So any of those rumours about it being repealed or him doing something that has eliminated these rules is not correct,” Hintzke told  a Deloitte breakfast meeting held last week to bring industry officials up to date on FATCA, as well as the Common Reporting Standard (CRS), a similar yearly automatic exchange of financial information system introduced in 2015 by the Organization for Economic Cooperation and Development.

 

However, she did not rule out a repeal altogether, saying it could happen “at some point in time” due to the increasing discussion on revamping the US tax code.

 

“As part of that, there is always the potential that FATCA would either be something that they give up . . . for something else or it could also be something that they decide is no longer necessary. But I don’t expect that to be the case.”

 

Hintzke said revocation of the regulation would be frustrating for financial institutions and countries that had put Hintzke all the necessary time, energy and measures in place in order to comply with it.

 

(Adapted from Barbados Today)