Financial Crime World

Intergovernmental Agreement Between Saint Kitts and Nevis and the United States Regarding FATCA Implementation

Overview of FATCA

The Foreign Account Tax Compliance Act (FATCA) is a law that requires foreign financial institutions to report certain information about their U.S. account holders to the IRS.

Key Points

  • The agreement aims to ensure compliance with FATCA regulations by Saint Kitts and Nevis financial institutions.
  • The agreement establishes an obligation for Saint Kitts and Nevis to obtain and exchange information about U.S. Reportable Accounts held by Reporting Saint Kitts and Nevis Financial Institutions.

Implementation Details

Article 2: Exchange Obligation

  • Obtain and exchange information about U.S. Reportable Accounts held by Reporting Saint Kitts and Nevis Financial Institutions.
  • Identify the currency in which each relevant amount is denominated.

Article 3: Time and Manner of Exchange of Information

  • Exchange information within nine months after the end of the calendar year to which the information relates.
  • Exceptions for 2014, 2015, and subsequent years regarding the type of information that must be obtained and exchanged.

Article 4: Application of FATCA to Saint Kitts and Nevis Financial Institutions

  • A Reporting Saint Kitts and Nevis Financial Institution is treated as complying with and not subject to withholding under section 1471 of the U.S. Internal Revenue Code if it:
    • Identifies U.S. Reportable Accounts and reports annually to the Saint Kitts and Nevis Competent Authority.
    • Registers on the IRS FATCA registration website.
    • Withholds tax at a rate of 30% for payments made to Nonparticipating Financial Institutions (if applicable).

Article 5: Specific Treatment of Saint Kitts and Nevis Retirement Plans

  • The United States shall treat as deemed-compliant FFI s or exempt beneficial owners, as appropriate, for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code.

Conclusion

This agreement aims to ensure that Saint Kitts and Nevis financial institutions comply with FATCA regulations and report information about their U.S. account holders to the IRS.