The United States government, through the Internal Revenue Service (IRS) and US Treasury yesterday issued further details regarding the proposed US Foreign Account Tax Compliance Act (FATCA).
In addition, a joint statement has been issued from the US and five other countries including the UK – click here.
As we have known for some time, these new regulations will have an impact on companies operating within Jersey's finance industry.
Jersey Finance is fully engaged at both industry and government level, including a specific FATCA Working Party in order to support members in dealing with the introduction of FATCA.
The FATCA provisions are in the form of guidance, which make it clear that the US has taken into account representations from foreign governments, of which Jersey was one, in seeking to minimise the reporting burden.
It is important to note that, not all financial institutions in Jersey will be engaging in activities that are affected by FATCA, or if they are some to only a rather limited extent.
The FATCA provisions will apply to all jurisdictions – they are not directed at centres such as Jersey alone – and so they should not adversely affect Jersey’s competitive position.
Jersey enjoys an excellent relationship with the US, and in fact the first TIEA that Jersey signed in 2002 was with the US. Jersey also has a Statement of Co-operation between the Jersey Financial Services Commission and the four United States financial regulators (Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and the Office of Thrift Supervision) to formalise existing arrangements for cooperation and information sharing.
A substantial amount of information has been released and we are now working to fully analyse the content of the draft regulations in order to provide further updates and specific guidance to Member firms.
Should you have any immediate questions, or wish to contribute comment to the Working Party, please contact Heather Bestwick.