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Nicaragua Prepares for FATCA

Original Article Text From La Prensa Nicaragua via Google Translate.

Nicaragua must prepare for FATCA. The measures taken by the U.S. Treasury to pursue American tax evaders will affect about 150,000 bank customers in the country.

Within almost a year and a half , i.e. 2015 , all banks in the world who are in possession of information on the financial statements of American citizens who are dual nationals or those in possession of a green card (residency) and living abroad must transfer to U.S. authorities .

The mission : to pursue American tax evaders and Nicaragua is not exempt , whose measures affect at least 150 thousand clients of the banking system , estimated Carlos A. Nunez Vivas, owner manager Foodman Vivas and Tax Compliance, a company specializing in U.S. tax issues , based in the U.S. and an office in Managua .

The fiscal persecution will be framed in the Law of Foreign Account Tax Compliance ( FATCA , for its acronym in English) . On 19 August, the Department of Treasury of the United States of America ( IRS , for its acronym in English) officially called for financial institutions to register and begin the process of accession to the American standard .

Once registered on the Web site of the IRS- newsletter explains KPMG – , financial institutions will receive notification of acceptance will be issued an identification number of overall broker ( GINN ) .In that sense , Nunez said that before April 25, 2014 financial institutions affected by the foreign law must comply with this procedure , because in June of that year he published a list of the entities that signed commitments required FATCA , it that will serve as a cover letter to when seeking external funding from U.S. sources .

The expert argues that the large number of customers who will be affected by the foreign law in Nicaragua is comparable with that is Costa Rica , and that’s why banks urged Nicaragua to begin the process of notifying their customers , to avoid delays in compliance dates established by EE UU . Until now the Superintendency of Banks and Other Financial Institutions ( Siboif ) has not ruled on whether the United States Government concluded with FATCA compliance , so that banks would have to sign directly with the IRS.

“In Nicaragua I noticed how people still have a false hope , so to speak , that perhaps FATCA is over, maybe the U.S. government to change its mind ( … ) Many customers still do not know the law because banks have not yet taken steps to notify their customers , “he says. Nunez says Nicaraguan banks that process must start now to avoid the blame customers for disclosing private information protected by bank secrecy . Remember that you cannot declare that customer information, if this does not give the authorization, which require obtaining permission time.

The expert also advised banks to initiate the electronic register at the IRS , ” the time goes very fast and it was already overtime and deadlines .” Then customers affected by this law will have to approach banks to regulate or authorize the submission of this American legislation .

Nunez says he may have some modifications FATCA law in Congress, but it is inevitable start-up . Possible reforms could be the issue of reciprocity imposed by law, as well as aspects of operational efficiency .

With FATCA Law U.S. government plans to raise 7.6 billion dollars over 10 years. Banks may withhold 30 percent on U.S. source payments to persons subject to this Act and to oppose their information pass to the U.S. Treasury . They may also cancelarles banking service . 

Original article in Spanish

From La Prensa Nicaragua