A dull-sounding American tax law with a long name may soon have big implications for Virgin Islands residents and the territory’s financial services industry. If the Foreign Account Tax Compliance Act, which became law in 2010, is enacted as scheduled by 2013, it could “significantly affect our business practices here,” Premier Dr. Orlando Smith told the House of Assembly Friday.
Under United States tax law, most American citizens and green card holders are required to pay taxes on their global income regardless of where they live. In practice, this requirement hasn’t always been followed, but in the wake of the 2008 global financial crisis American officials renewed efforts to recoup what they believe is lost tax revenue.
Dr. Smith said that FATCA will expose Virgin Islanders with US citizenship to “the possibility of increased reporting obligations” to American tax authorities, with “severe penalties for non-compliance.”
See the July 5, 2012 edition for full coverage.
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