To prevent global impact of U.S. tax law on banking culture
The U.S. tax law that would force financial institutions worldwide to report to U.S. tax authorities will increase expenses and modify global banking culture, financial experts said today.
"From 2014 we will have another way of banking," said at a press conference the specialist in risk consulting firm Deloitte, Ramon Arosemena.
During the talk about U.S. tax law for foreign accounts (FACTA), another expert from Deloitte, Domingo Latorraca, said all financial firms (from banks to brokerage firms) must abide "voluntary" that norm.
Financial institutions must abide U.S. law to register with the tax authority of that country between July 15 and October 15 and report U.S. citizens accounts before December 31, 2013.
Experts pointed out that those financial companies that refuse to submit to the law will face a retention of 30 percent of their cash flows from the United States.
Moreover entities who choose to accept the agreement must meet certain requirements to prevent sanctions of withholding 30 percent.
According to experts, Panamanian banks are preparing to implement new systems from 2014 to identify American clients.
Latorraca noted that financial firms need to change their processes, develop new technology platforms and prepare their personnel, but mostly accept the costs to comply with U.S. demands.
With this legislation, the United States "will transfer part of their responsibilities to others," said Latorraca on the initiative of the American tax authorities intended to secure the payment of taxes from US citizens.
Arosemena said that avoiding U.S. clients "is not a strategy", which is right to confront U.S. domestic legislation with.
But also, Latorraca said the U.S. standard may be a deterrent for U.S. citizens to prevent tax evasion.