LA PRENSA, of Managua, Nicaragua interviews Carlos Nuñez-Vivas, September
24, 201
By: Wendy Álvarez Hidalgo
Worldwide
and national banks will have to comply with rules set forth by the Foreign
Account Tax Compliance Act (FATCA) in order to continue to have access to US
sources of capital.
By 2015, almost a year and half from
today, all banks worldwide that hold information on financial assets owned by
US citizens, those who hold dual citizenship or are in possession of a “green
card” (USA permanent residents) and reside in another country, will have to disclose
such information to United States authorities.
The aim is to curtail tax evasion by
U.S. tax payers, and Nicaragua is not exempt from this task. According to Carlos A. Núñez Vivas, owner and
manager of Vivas & Foodman Tax Compliance, a US-based business that
specializes on Tax issues with an office in Managua, FATCA might affect at
least some 150 thousand bank customers in Nicaragua.
The task of tracking tax evasion is outlined
by the Foreign Account Tax Compliance Act (FATCA). On August 19 of this year, the Department of
the Treasury of the United States of America, through the IRS, called on all
financial institutions to register and start the process to comply with said
American law.
Once they sign up in the IRS on-line
registration portal—as explained in a bulletin of the KRPMG firm–, financial
institutions shall be notified that they have been accepted and will be issued
a global intermediary identification number (GIIN).
What follows, Núñez said, is that before
April 25, 2014, financial institutions affected by this foreign law must comply,
because in June of that year FATCA will announce a list of all entities that
committed to follow FATCA’s regulations, which the financial institutions may
use as a letter of introduction when seeking external financing from U.S.
sources.
The expert said that the high number of
bank clients who will be affected by this foreign law in Nicaragua is comparable
to Costa Rica’s, and for this reason he urged Nicaraguan banks to start the
process of notifying their clients in order to beat the deadlines established
by the U.S. government and thus avoid compliance delays.
To date, the Bank Superintendence and other financial
institutions have not announced whether the Nicaraguan government will commit
to a FATCA intergovernmental agreement, so the banks might have to sign one
directly with the IRS.
GET
THEIR CLIENTS READY
“I
have noticed that in Nicaragua people are wishful thinking, so to speak, hoping
that FATCA will go away, that the U.S. government will change its mind(…) Many
clients still know nothing about this law because the banks have not taken the
steps necessary to advise them on the matter”, he stated.
He said that Nicaraguan banks should
start the process now in order to avoid the possibility that their customers
may blame them for disclosing private information protected by bank secrecy. He
also reminded that information on the client may not be disclosed without his
or her authorization, and that obtaining such consent would take some time.
The expert also advised that banks should
start electronic registration with the IRS, “time goes by quite swiftly; an
extension was given and now we have deadlines.”
The next step is for clients affected by this law to go to the bank and
regularize their situation by authorizing compliance with the American law.
THERE
WILL BE NO GOING BACK
Núñez said that Congress might make some
amendments to FATCA, but that its implementation is inevitable. Some areas of possible modification are the legal
matter of reciprocity, and the issues related to operational efficiency.
With FATCA, the U.S. government aims at
collecting revenue of up to 7.6 billion dollars in a ten-year period. Banks may
withhold 30% of payments from U.S. sources to persons affected by this law who
oppose having information on their accounts end up in the hands of U.S. tax
authorities. Banks might also stop providing banking services to them.