US, Bermuda sign tax evasion agreement

The US and Bermuda have agreed to a treaty that officials hope will increase transparency and help fight tax evasion.

The US enacted the Foreign Account Tax Compliance Act (FATCA) in 2010 in an attempt to obtain accounts held by American taxpayers in other countries.

That legislation gave the US government a green light to enter into intergovernmental tax agreements with other countries.

The Bermuda FATCA agreement calls for foreign financial institutions to identify and annually report key information about US account holders directly to the US Internal Revenue Service.

Those institutions that don’t provide information will be subject to a 30 per cent withholding tax on certain American source payments like interest rates.

US Consul General to Bermuda Robert Settje and Bermuda Minister of Finance Bob Richards signed the agreement today in the Senate Chamber of the Cabinet Building.