Bangladesh
Bank has advised the bank companies which have accounts of US taxpayers to
report to the country’s internal revenue service (IRS).
A circular
issued yesterday made the advice to do it as per Foreign Account Tax Compliance
Act (FATCA) of the United States.
As
Bangladesh government has not yet decided to execute an intergovernmental
agreement with the US, the obligation can alternatively be discharged at
individual bank level by registering and signing ‘Participation Agreements’
with the IRS, it said.
National
Board of Revenue also consented on registering with the IRS if a bank has US
taxpayer accounts in its books.
FATCA
enacted in 2010 requires a foreign financial institution (FFI) to report to the
IRS information about certain accounts held by US taxpayers or by foreign
entities in which US taxpayers hold a substantial ownership interest.
According
to the definition of FFI, all banks as defined in the Bank Company Act, 1991
have come within the provisions of FATCA.
Banks said
FATCA may have implications for their customers and operations should register
themselves with the IRS and put in place appropriate processes and controls to
ensure compliance with the law.
The
concerned banks are advised to visit the IRS’s website,
www.irs.gov/fatca-registration, for necessary guidance in this regard.
Banks
should communicate with the existing customers well in advance of executing
“Participation Agreement” with the IRS enabling the accountholders to comply
with reasonable requests for information or to provide acceptable documentation
to meet the FATCA obligations, according to the circular.
Bangladesh
Bank said because the agreement requires disclosures which would normally
be breaches of the banker’s general duty of confidentiality under prevalent
Bangladeshi
laws
including the Bankers’ Books Evidence Act 1891, banks are to obtain written
consents from their customers before reporting the requested information to
IRS.
News Source:-
Dhaka Tribune
Dated:- 17-Jan-2014
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