Barbados Moves to Enhance Tax Compliance with US Under FATCA Agreement

The Government of Barbados has taken a significant step in improving tax compliance with the United States by signing the Model 1A reciprocal Inter-governmental Agreement (IGA) on November 17, 2014. This agreement aims to combat international tax evasion by automatically exchanging information between the two nations.

Key Provisions

• Barbados will share financial account data held by Reporting Barbados Financial Institutions with respect to US reportable accounts with the Internal Revenue Service (IRS).
• The regulations govern the exchange of financial account information and outline the obligations of Reporting Barbados Financial Institutions.
• Reporting institutions must register with the IRS and acquire a Global Intermediary Identification Number (GIIN) before registering with the Barbados Revenue Authority via the Automatic Exchange of Information Web Portal.

Implementation Details

• The Income Tax (Automatic Exchange of Information) Regulations, 2015 were enacted to implement this agreement. They were later repealed and replaced with the Income Tax (Automatic Exchange of Information) Regulations, 2017.
• Reporting institutions are required to collect and report financial account information annually, which is then exchanged with relevant jurisdictions through the portal.

Resources for Reporting Institutions

• The Barbados Revenue Authority has provided user manuals and frequently asked questions documents to guide institutions through the process.