Published On: Mon, Jun 2nd, 2014

Americans can be verified in Curacao for tax purposes

American justiceWILLEMSTAD - American citizens living in Curacao can be formally verified whether they have paid their taxes or not. Recently Curacao has signed an agreement with the United States, which makes this verification possible.

FATCA became effective this year. It requires all foreign financial institutions (FFIs) to enter into an agreement with the US government and disclose foreign account information of US account holders. This includes all banks and financial institutions in Curacao. In order to effectively force FFIs into compliance, institutions who fail to supply this information to the US government will be subject to a punitive 30% withholding tax on all payments cleared through the United States banking system (most FFIs clear payments through the US banking system).

FFIs will provide the US Department of Treasury with identifying information on all US account holders, including the name, address, tax identification number, account number and the account balance. Last year, the US government launched an online registration program for FFIs around the world to facilitate information disclosure under FATCA. This information will be used by the US government to investigate any US taxpayers who have not previously disclosed their offshore accounts.

In addition to income disclosure, the US Financial Crimes Enforcement Network (FinCEN) requires US persons (including US citizens and green card holders) to annually report their foreign financial accounts. US persons must file Form 114 (also known as Report of Foreign Bank and Financial Accounts (FBAR)), which reports all foreign financial accounts to numerous agencies within the US government. The failure to file Form 114 could lead to severe civil penalties and criminal prosecution.

 

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