Bangko Sentral Gears for US Tax Evasion Law

The Bangko Sentral ng Pilipinas (BSP) is readying itself as to what sanctions should be imposed against Philippine banks that do business with Americans but violate the United States Foreign Account Tax Compliance Act (FATCA).

In a report on Monday BSP Governor Amando Tetangco Jr, in a statement Monday, said the BSP is currently studying the possible sanctions to impose against local banks that transacts business with US persons but fails to comply with FATCA.

“The BSP will study what sanctions, if any, we will impose if a local bank decides it wishes to handle US persons but exposes itself to financial and legal risks by not complying with FATCA,” Tetangco said in the emailed statement.

The governor added that in a memorandum issued to banks in July 2013, the BSP advised the banks to individually evaluate if they are covered by FATCA including the potential implications on their business and to prepare their operating businesses as appropriate. He also said the burden of compliance is on the part of individual banks.

The FATCA will take effect this year for the purpose of running after American tax cheats outside US.

“If it decides to handle US persons, then they must manage all risks associated with that including all compliance issues, If it doesn’t want to be covered by the FATCA rules, then they simply should refrain from handling US persons,” Tetangco added.

Reports added the Department of Finance shares the position of the Bureau of Internal Revenue for the Philippines to adopt the Model 1 Intergovernmental Agreement.

The US Department of Treasury reportedly said the Model Intergovernmental Agreement to Improve Tax Compliance and to Implement FATCA is an agreement between the US government and the governments of FATCA partner to improve international tax compliance, report said.

The BSP governor said that in the Philippines, the Bureau of Internal Revenue is the likely FATCA partner that will supply the information to its US counterpart the Internal Revenue Service.

Source: Gma News Online