Financial Crime World

Cabo Verde and US Agree on FATCA Agreement

In a significant move, Cabo Verde and the United States have reached an agreement to implement the Foreign Account Tax Compliance Act (FATCA), aimed at ensuring international cooperation in tax matters.

What is FATCA?

FATCA is a law that requires foreign financial institutions to report information about financial accounts held by US persons or maintained by US-owned entities. The goal of FATCA is to combat tax evasion and promote international cooperation in tax matters.

The Agreement

Under the agreement, Cabo Verde will collect and exchange information with the US about financial accounts held by US persons or maintained by US-owned entities. The information will be exchanged annually, starting from 2015 and 2016, and will include:

  • Names of account holders
  • Dates of birth
  • Balances of their accounts

Special Treatment for Cabo Verdean Retirement Plans

The agreement also provides for a special treatment of Cabo Verdean retirement plans, which will be deemed compliant with US tax requirements. This means that these plans will not be subject to withholding taxes or other penalties.

Implementation and Exchange of Information

The agreement outlines procedures for the automatic exchange of information between Cabo Verde and the US, as well as rules and procedures for implementing FATCA in both countries.

Confidentiality and Protections

All exchanged information will be subject to confidentiality and other protections, including provisions limiting the use of the information exchanged.

What Does This Mean for You?

As a result of this agreement:

  • US persons with financial accounts held in Cabo Verde may need to provide additional information about their accounts and account holders.
  • Cabo Verdean retirement plans will no longer be subject to withholding taxes or other penalties under FATCA.

Conclusion

This agreement demonstrates the commitment of both countries to promoting international cooperation and combating tax evasion. The implementation of this agreement is expected to come into force by the end of 2017, once both countries have completed their respective domestic procedures.