Although details about the Foreign Account Tax Compliance Act that will come into force January 1, 2013, remain sketchy at this time, industry leaders are warning that the impact of the new US tax initiative may be far-reaching. In an excerpt from an interview with The Bahamas Investor, principal at Prime Advisory Group, Benno Räber, says that the new standards will change the industry and the way financial intermediaries do business with US clients.
A leading financial advisor has warned that the Foreign Account Tax Compliance Act (FATCA) will place a significant burden on financial intermediaries in The Bahamas when it comes into force January 1, 2013.
“FATCA is a huge concern,” says Benno Räber, principal at private wealth risk management firm Prime Advisory Group (PAG). “It will be a big issue for financial institutions in terms of organization.”
Räber believes that financial intermediaries will be most affected by the upcoming legislation, which requires all foreign financial institutions (FFIs) to disclose information on US clients. The Act has broadened the scope of the previous Qualified Intermediary (QI) system to include bodies such as brokers, investment companies and fund structures. Accounting firm Ernst & Young estimates that this will affect 50,000 to 100,000 financial intermediaries worldwide.
…continue >