The Ministry of Finance wishes to implement a comprehensive integrated application to manage both the United States of America’s Foreign Account Tax Compliance Act (FATCA) and the Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard for Automatic Exchange of Information (CRS – AEol).
In order to achieve FATCA compliance, the Commonwealth of The Bahamas entered into a Model 1 Inter-Governmental Agreement (IGA) with the USA. Through the IGA and enabling legislation, Foreign Financial Institutions (FFI’s) incorporated in The Bahamas are required to report specified information with respect to US account holders to the Competent Authority (CA) in a standardized electronic format established by the IRS. The Competent Authority then transmits that information to the IRS.
Following the establishment of US FATCA, the OECD created a standard for automatic exchange of financial account information in tax matters to establish a global standard for the automatic exchange of information. The scale of CR5 is much greater than FATCA and it extends to any customer who is tax resident in a “reportable jurisdiction”. The Common Transmission System ( as) platform was created to facilitate the exchange of tax information between Competent Authorities (CAs) around the world, securely and efficiently. Bahamas registered financial institutions (FIs) will submit specified information in the required format to the Bahamas CA which will in turn connect to the CTS to exchange that information in a
secure way with the relevant CA through the CTS.
The main objective of the engagement is to provide the interface (the “Portal”) between i) the Competent Authority and industry and H) the Competent Authority and the respective foreign tax authorities through the International Data Exchange Service (“IDES”) and the CTS to enable The Bahamas to meet its reporting obligations under FATCA and CR5 in a timely, secure and efficient manner.
The Portal is expected to be a fully automated solution that allows users to upload the information with respect to the reporting regimes outlined above and the Competent Authority to forward that information to the relevant authority with no manual input on its part i.e. the Portal is expected to be a push-button solution for The Bahamas CA.
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