News that Guernsey was considering such a move was revealed yesterday at an "oversubscribed" breakfast briefing on FATCA held in Guernsey by KPMG, the accountancy firm, according to a report in the online edition of the Guernsey Press & Star.
It was later confirmed by a spokesman for Guernsey’s government, who said the island’s authorities were in discussions with its finance industry on whether it should join the five European countries in their approach to complying with America’s pending Foreign Account Tax Compliance Act (FATCA) legislation.
In a statement today, Peter Niven, chief executive of Guernsey Finance – the promotional agency for the Island’s finance industry –noted that Guernsey has had government and industry working parties monitoring FATCA "for some time", and that the focus has moved on to "digesting details of the latest proposals and developments, including the intergovernmental exchange of information agreements made between several countries, such as the UK, and the US".
"We are looking at all options open to us for the future, and while this does include following the UK’s lead in reaching an agreement with the US, that is only one potential road to take, and at this stage we are not discounting any possibilities," he added.
"All options remain on the table."
As reported, earlier this month, the US Treasury Department issued a joint statement with the governments of France, Germany, Italy, Spain and the United Kingdom which detailed a new framework for an intergovernmental approach to international tax compliance generally, and implementation of America’s pending Foreign Account Tax Compliance Act (FATCA) legislation in particular.
At the time, the Treasury said it was talking to other countries about the possibility of also taking part.
FATCA, which was signed into law in 2010 but does not begin to take effect until next year, was designed to enable the US Internal Revenue Service to find out about, and tax, income US citizens receive outside of the US, principally by requiring non-US banks and other financial institutions to report to the IRS on all their American clients.
According to the GP&S, "if [Guernsey] was allowed to partner with the US, it could make the process [of complying with FATCA] much simpler for financial services businesses and their clients, as it could remove the need to impose a withholding tax and reduce some of the reporting burden."
The GP&S story quoted Tony Mancini, tax executive director at KPMG, as saying: "The States and all the Crown Dependencies are thinking about being a FATCA partner."
Guernsey officials were not available for comment late last night.
