The Premier, Hon. Rufus Ewing last week announced that the government will be signing an agreement to impose FATCA in the Turks and Caicos. The law was passed by the US to combat the issue of tax evasion and requires Foreign Financial Institutions to report to the IRS financial activities of US citizens living overseas, which includes Turks and Caicos islanders with US citizenship.
Banks and financial institutions in other countries have already been weighing on the FATCA agreement in their countries. They describe reporting as ‘cumbersome and expensive and poses a high legal risk for banks and claim compliance will be impractical if not impossible.’
In an article posted by the New York Times, FATCA requires these financial institutions to report financial information of American citizens living overseas with at least $50, 000 on their accounts or to withhold 30% of the dividend or interest to those clients and send that money to the IRS.