Panama FACTA Banking Act Banks and Americans Concerned

by ISOG

Panama FACTA Banking Act Banks and Americans Concerned.

The Panamanian banking system is very concerned for the entry into force on 1 January 2013 of FATCA (Foreign Account Tax Compliance Act), of the United States which requires signing complicated agreements no later than 30 June 2013 in order for banks not to be fined by the U.S. Internal Revenue Service (IRS).

The act introduces a withholding tax system that affects all private entities that have contacts with the United States. According to the act, the U.S. IRS will retain 30% of the value of transactions that banks in Panama and other countries make with correspondents in the United States.

The Banking Association of Panama said that Panamanian authorities are consulting with the IRS to reach an agreement similar to what Spain, Italy, Germany, UK, Japan, and Switzerland are negotiating.

The U.S. government wants by this act to win the war on tax evasion estimated at USD 450,000 million annually. FACTA requires banks and financial institutions located outside the United States, to report the Americans with offshore bank accounts to IRS automatically.

The Banking Association of Panama, said that it will be up to the banks and financial institutions to adapt their organization to implement FACTA and that it will not be the government to establish how. Financial institutions may also decide not to accept U.S. clients but this will affect the relationship of those entities with such clients.

However, there are steps U.S. clients can take. Firstly, they will have to put all their assets in offshore anonymous companies which will then manage those assets. Secondly, the same clients may acquire a second citizenship that entitles them to a second passport with which they can open new offshore bank accounts.

Panama FACTA Banking Act banks and americans concerned? ISOG lawyers can provide such services which in a few months would allow Americans to operate in a way equal to that of the other clients of those financial institutions.