Ministry hosts local seminar on new US tax bill
(CNS): People holding a US passport who live in the Cayman Islands may owe back taxes to the American government as a result of new legislation. The Premier’s Office and the Finance Ministry with the local industry body, Cayman Finance, will host a seminar next week on US tax obligations for Caymanians with US passports, US citizens, Green Card holders, long term non-residents of the US, and financial institutions on the directives of the Foreign Account Tax Compliance Act (FACTA). The law, which will come into effective January 2013, seeks to enforce reporting of US held foreign accounts andimposes a 30% withholding tax on foreign entities that refuse to disclose US account holders.
In his role as Finance Minister, McKeeva Bush said, “It is imperative that all US citizens, Green Card holders and long term non-residents that live and work in the Cayman Islands understand their obligations to the US Treasury and the IRS, ” and he invited the public to attend the free session. “I encourage all Caymanians with US Passports to attend this event, as well as those who are unsure of the filing and reporting procedures for US income taxes under the new act,” Bush added.
The seminar will take place on Tuesday, 19 April, at the Marriott Grand Cayman Resort. In the morning session between 9:00am to 12:30pm the focus will be on financial institutions to increase their understanding of the new criteria surrounding US taxes for their clients.
Discussion areas include an overview of FACTA; an analysis of the legislation and the implications for Cayman residents; the Cayman Islands Government delegation’s meetings with the IRS; and opportunities for Cayman.
In the afternoon session between 1:30pm and 5:00pm the position of US Citizens, Green Card holders and long term non-residents will be examined. Organisers say it will provide valuable information for individuals who were born in the US or have family members that were born in the US with regards to tax requirements. Topics include: tax and reporting obligations – what you may owe; filing US income tax returns; and where to find assistance from local firms.
A networking reception from 5:00pm to 7:00pm is also open to the public and will provide an additional forum to network with the presenters and government officials.
The bill was passed in March last year to prevent offshore tax abuses and the implications of the new withholding regime are wide-ranging for financial institutions, investment entities, and many other organisations that operate on a global basis. Foreign banks and other financial institutions must reach an agreement with the IRS and identify US accounts or they could subject their owners to a 30 percent withholding tax.
The definition of affected foreign financial institutions (FFIs) is broad and wide-ranging, and includes entities that manage investments, including alternative investment entities and insurance companies.
Non-financial foreign entities (NFFEs) will be required to disclose whether they have any 10 percent U.S. owners. NFFEs that fail to document the existence or non-existence of US owners may be subject to the 30 percent withholding tax regime.
For more information on FACTA see KPMG fact sheet
Category: Business
The law of unintended consequences is likely to be in play here. And it has nothing to do with rooting out US tax payers who are engaged in tax evasion.
The draconian provisions of FATCA/HIRE, that require 30% withholding on payments to non compliant foreign financial institutions, and the proposed Treasury Regulations, that will require banks in the US automatically to report interest paid to certain foreign accountholders, may together lead to significant entirely legitimate foreign investment leaving the US. That in turn may exacerbate the weakness of the US dollar and the US economic and fiscal position.
The US is no longer in the enviable position to dictate outcomes to the rest of the world (our dollar, your problem!). There are now other expanding markets where capital can be invested more securely and efficiently.
Unfortunately, draconian is what is needed now that privatized wealth and speculation has caused such global economic, social, and political turmoil. It’s why capital gains taxes were first introduced in the 1920s in the US, as a brake on (over)accumulation.
A global wealth re-distribution policy needs to be developed to stop the tax avoidance culture that has underpinned the theft (read: privatization) of the social and economic infrastructure that citizens work and pay for around the world…. not allow it to be transformed into private wealth.
I want to go and address my pension issues. Problem is I file my US taxes but I can never get the information from the pensions provider. Anyways I always found it a hobby to collect passports and I have 4 different nationalities and I am working on a fifth. I had a fun time in the US but I guess those days are over anyways Asian is carrying the swing and my Cayman is where I was born so I not too worried about good olde USA tired of the place and seeing pictures of Asia the wise these days know that the US isn’t the envy of the world anymore it is just as backwards as this law which hopefully for the good of it will be repealed for common sense sake. Think about it for a minute…you don’t live in the US to consume the service that they offer and they don’t provide social benefits like the UK unless you work and are laid off so the overseas citizens are not a burden aside from the minimal funds used to provide passports etc. Now you can’t get ride of the citizenship even if acquired by birth with no connection to the USA just to avoid their law? Wake up USA 75% of the worlds economy and 96% of its population is outside of your borders. The last time I checked If I gave up 1 25cent out of a dollar I wasn’t the end of the world. They need to stop trying to bully people to pay for their jobs programmes. Basically they need to get off the cocaine and ganja become more productive and get ride of their society and legal flaws which makes them unproductive. Maybe if they had the political will and the “americans” had the ambition to pick fruits then they wouldn’t need to create jobs as they could get ride of the illegals immigrants instead of pursuing me around the globe. Truth is more and more Americans are leaving I know many Asians who are leaving to go back to their roots after 2 -3 generations in America because of better opportunities in their home countries. Americans are retiring in Panama, the Caribbean and Costa Rica just to get access to a better standard of living, better enviroment and healthy/afforable lifestyle. Looks like they need to fix what is broken and stop harassing people who have no intention or want to live in their broken country. It seems as if they are trying to prevent the exodus more and more. When I tell friends and family in the US all I am doing is seeing money all they tell me is it a struggle.. O well ..thats how it goes
Trying to give up that US passport will end up with a 40% tax immediately on all your worldwide assets due to the IRS
HA HA HA HA!!!!!!
I have to laugh at all the people who trying to fight hard to get American passports because they think that the US is such a great counrty. Who think that a Caymanian passport, and who can easily get a British passport, is not good enough to them. I sit back and just laugh now! They na going want the American passport now. OOHH LAWD!!!!
Uncle Sam,
Can I get a cut of money if I rat on a few people down here?
KFI
You can indeed.
I would never surrender my citizenship just to avoid taxes and I’m quite happy to pay any ‘price’ attached to having it. It’s my ticket out of this sinking country (Yes, I am Caymanian).
I wish I had a US passport. There are still another 49 states without Cayman Liaison Officers!!!!!!
Do you have a spare parent that could be used as a pawn to protect politicians from scrutiny? That apparently helps with such applications.
Oooooo! All those Caymanians who so proudly flash those passports with the eagle on the cover are going to find that there are going to be strings attached after all. In some cases these could be quite costly strings: years of back taxes, plus penalties, plus interest – this could hurt, big-big-big time. Things are going to get interesting!
Anyone who has enough money for this to matter to has already done the sensible thing, ripped up their US passport and renounced their Citizenship.
Another waste of time from Mac
Renouncing US citizenship to avoid having to pay taxes is illegal and if they find out (and I know of two cases in which they did), the penalties are far worse then keeping the citizenship and paying those taxes! Uncle Sam is becoming far more observant.
If “observant” is another word for evil mindless limitless greed, then Uncle Sam is becoming more “observant” than ever.
Thank God and all that’s good that the USA’s days of unbridled power are coming to an end.
Renouncing your citizenship does not relieve your obligation to pay taxes owed previous to that. They can still come after you to pay up. And they will
Sorry
Ignorance like what you are uttering is exactly why people should attend this seminar. If you think ripping up your US passport eliminates your debts to the IRS then you are sadly mistaken.
You are neither an accountant nor a lawyer, so how can you give such advice?
Anyone who is in such a position should go to hear what other professionals have to say and not get their advice from political naysayers who don’t know what they are talking about.
Your advice is dangerous and irresponsible.
It may not eliminate your debt, but it can certainly prevent from continually incurring more debt as the US government spend the country into extinction.