By NATARIO McKENZIE
Tribune Business Reporter
A former financial services minister yesterday warned that it was “only a matter of time” before the US adopts the Common Reporting Standard (CRS) for automatic tax information exchange, throwing his support behind its listing as a “participating jurisdiction”.
Ryan Pinder, now a Graham, Thompson & Company partner, told a Bahamas Institute of Financial Services (BIFS) seminar: “It’s only a matter of time before CRS is adopted by the United States.”
He added that the CRS is “broader in scope” than the US Foreign Account Tax Compliance (FATCA) initiative, which is itself a form of automatic information exchange.
“The query is, from the Bahamas’ point of view, do we list the US as a participating jurisdiction or do we not, and that’s a determination that we would have to make as a government,” Mr Pinder said.
“Certainly, I support listing them as a participating jurisdiction. Anything that would differentiate us on a cross-border basis from Cayman and the BVI is good.”
The Cayman Islands and British Virgin Islands (BVI) have not listed the US as a participating jurisdiction.
US-based tax expert and attorney, Steve Cantor, said the US will probably adopt the common reporting standard (CRS) “one way or the other”.
“People say that the US is the biggest tax haven there is because they don’t have ultimate beneficial ownership rules,” Mr Cantor said.
“There are a few reasons why the US is probably going to adopt CRS one way or the other. First and foremost, the US is going to get a lot of pressure next year when a lot of these [FATCA] IGAs are up for renewal, and some will argue that they are providing the US with information, and so the US should provide them with information.”
“The Commissioner of the Internal Revenue Servicesaid that he is in favour of the US adoption of the CRS,” said Mr Cantor, adding that the issue would ultimately have to be passed through and dealt with by Congress.
The CRS is the OECD’s initiative for a global automatic exchange of tax information standard. Currently, more than 90 jurisdictions have committed to the OECD Multilateral Convention on Mutual Administrative Assistance in tax matters, and over 60 have signed a Multilateral Competent Authority Agreement that permits participating countries to enter into agreements that provide for the automatic exchange of information.
The US has not agreed to adopt the CRS, instead continuing to rely on FATCA and its intergovernmental agreements (IGAs) to achieve its automatic exchange of information objectives.