Automatic Exchange of Information (AEOI) Compliance – FATCA & CRS
As part of our regulatory obligations under the Income Tax (Automatic Exchange of Information) Regulations of Barbados, as amended, the Insurance Corporation of Barbados Limited (ICBL) is required to collect and report certain customer information to the Barbados Revenue Authority (BRA). These requirements are in line with international standards for the automatic exchange of financial account information under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS).
These obligations form part of Barbados’ commitment to transparency and international cooperation in tax matters.
FREQUENTLY ASKED QUESTIONS (FAQs)
1. What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is a U.S. tax law that requires financial institutions outside the United States to identify and report U.S. account holders to the U.S. Internal Revenue Service (IRS) via the Barbados Revenue Authority.
2. What is the Common Reporting Standard (CRS)?
The Common Reporting Standard (CRS) is a global standard developed by the Organisation for Economic Co-operation and Development (OECD) for the automatic exchange of financial account information between participating countries. Barbados is one such participating jurisdiction.
3. Who is considered reportable?
Under FATCA, a reportable person is:
- A U.S. citizen or U.S. tax resident
- Certain U.S. entities, including those with substantial U.S. ownership.
Under CRS, a reportable person is:
An individual or entity who is tax resident in a country other than Barbados or another CRS participating jurisdiction.
Certain passive non-financial entities (NFEs) with controlling persons who are tax resident in another country.
4. What are ICBL's customer due diligence requirements?
ICBL is required to:
Identify the residency for tax purposes of all account holders and controlling persons (in the case of certain entities)
Collect self-certification forms to determine reportable status.
Maintain records of account holder classifications and due diligence efforts.
Report financial account information to the Barbados Revenue Authority (BRA) annually.
5. What types of policies are reportable?
The following policy types may be reportable under FATCA and CRS:
- Cash Value Insurance Contracts: These are life insurance contracts with a cash surrender value (e.g., investment-linked policies).
- Annuity Contracts: Insurance contracts that provide payments over time, typically for retirement.
Note: Pure protection products such as term life or health insurance with no cash value are not reportable.
6. What information is reported to the BRA?
The following may be reported:
- Name, address, jurisdiction(s) of tax residence, Tax Identification Number (TIN)
- Account/policy number.
- Account/policy balance or value.
- Gross amounts paid or credited (e.g., surrenders, withdrawals)
This information is shared with the relevant foreign tax authorities under applicable treaties and agreements.
7. What do customers need to do?
To comply with these regulations, customers must:
- Complete and return Self-Certification Forms accurately and promptly when requested.
- Disclose all relevant information, including tax residency.
- Notify ICBL within 30 days of any changes in:
- Tax residency
- Legal name or address
- Ownership or control of an entity
- Any other material change that may affect your FATCA/CRS status
Failure to provide accurate or timely information may result in:
- Reporting of your account information
- Restrictions on certain transactions
- Other legal or compliance consequences
8. How does this relate to Anti-Money Laundering (AML) regulations?
ICBL is also required to comply with Barbados' Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. This includes ongoing monitoring and customer due diligence. The FATCA and CRS requirements complement these obligations, further promoting transparency and financial integrity.
FINAL REMINDER
ICBL is committed to complying with all applicable laws and regulations. We appreciate your cooperation and timely responses. If you have any questions or need assistance with your self-certification, please contact submit your queries via email to [email protected].
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