Gibraltar’s financial services sector must act now to embrace the Foreign Account Tax Compliance Act (FATCA), says Nicola Smith, CEO of Helvetic.
Along with a number of countries, Gibraltar signed the Model 1 Intergovernmental Agreement (IGA) with the US, meaning all financial organisations in the territory must submit details of financial accounts on all US citizens to the Gibraltar tax authorities.
To prepare for the new regulations, which came into force on 1 July 2014, the Gibraltar Association of Compliance Officers (GACO) held an event with Thomson Reuters to address concerns surrounding the arrival of FATCA, notably the complexities of on-boarding customers for both US and UK FATCA.
Smith said: “What many do not realise is that the administration costs for collating and sending the information have to be met by the financial organisation and not the US government.”
“We, at Helvetic, have prepared for the additional workload in light of the new requirements.”
Charles Foster, risk director of Helvetic and committee member of GACO, said: “It’s imperative we work together with the financial community of Gibraltar in order to provide them with all the necessary information.”
“Other countries have seen organisations turns US citizens away from their services because of mistaken perceptions about complexity in complying with FATCA and that registration is only required if you deal with US citizens.”
“This is not the case, it is highly likely that if you are a foreign financial institution you will need to register whether or not you have clients who are US citizens.”
