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FATCA Compliance Requirements for Financial Institutions in Saint Kitts and Nevis

Saint Kitts and Nevis has taken significant steps to comply with the Foreign Account Tax Compliance Act (FATCA), a US law aimed at reducing tax evasion by foreign financial institutions.

Intergovernmental Agreement Signed with the US

On August 31, 2015, Prime Minister Dr. Timothy Harris and the US Ambassador to Barbados, Larry Palmer, signed an intergovernmental agreement to implement FATCA between Saint Kitts and Nevis and the United States. This move marked a significant milestone in the country’s efforts to comply with the law.

FATCA Legislation Passed

The National Assembly passed legislation to undertake the implementation of FATCA in September 2015, which was subsequently gazetted. The legislation requires financial institutions in Saint Kitts and Nevis to report certain information about their US clients to the Financial Secretary, who will then transmit it to the IRS.

Key Provisions of the Legislation

  • Requires financial institutions to report information about their US clients
  • Designates the Financial Secretary as the Competent Authority for FATCA purposes
  • Delegates specific duties to the Comptroller of Inland Revenue Department

Implementation Details

  • The Financial Secretary has been designated as the Competent Authority for FATCA purposes in Saint Kitts and Nevis.
  • A unit within the Inland Revenue Department is being operationalized to deal with FATCA-related matters, and staff are being trained on the use of FATCA software.
  • The country has acquired a software package that will facilitate the receipt and transmission of data for FATCA purposes. Implementation of the software will commence shortly.

Registration Requirements

Foreign Financial Institutions are required to register on the IRS website before reporting commences. Those who have registered with the US IRS will be issued a Global Intermediary Identification Number (GIIN) and will appear on a monthly published IRS FFI list.

Role of the Responsible Officer

The Responsible Officer is appointed to ensure that the participating foreign financial institution meets the requirements of the agreement. They must review the adequacy of the program, report material errors, and prepare certification within six months of every certification period.

FAQs Available

For more information on FATCA compliance in Saint Kitts and Nevis, a list of frequently asked questions (FAQs) is available online.

Implementation Timeline:

  • August 31, 2015: IGA agreement signed with the US
  • September 15, 2015: FATCA legislation passed by the National Assembly
  • Currently: Acquiring software package for FATCA purposes
  • Shortly: Implementation of software will commence