Seychelles and US sign Foreign Account Tax Compliance Act |02 July 2019

Ambassador Reimer (left) and Minister Loustau-Lalanne signing the documents

American companies and individuals doing business transaction and holding an account in Seychelles will find it harder or impossible to evade paying taxes now that the US and Seychelles governments have signed the Foreign Account Tax Compliance Act (Fatca).

The documents were signed on behalf of the Seychelles government by the Minister for Finance, Trade, Investment and Economic Planning, Maurice Loustau-Lalanne, and the United States ambassador to Seychelles, David Reimer.

The signing took place at the ministry’s conference room in the presence of the secretary of state for Finance Patrick Payet and the economic and commercial officer based at the US embassy in Mauritius, Paul Stempel.

Fatca is a US law passed by the American congress in 2010 in the fight against tax evasion.

Its aim is to prevent US taxpayers from using foreign accounts to facilitate the commission of tax offences. This works through a system whereby financial institutions around the world can report directly to the Internal Revenue Service (IRS) about foreign assets held by US account holders.

The signing of the agreement, specifically for the US nationals, now requires the Ministry of Finance and other financial Institutions such as the banks and Seychelles Revenue Commission (SRC) to report to the Fatca information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest.

In his speech for the occasion, Minister Loustau-Lalanne said he was extremely pleased to be signing such a long awaited agreement.

He further noted that as a small jurisdiction, to sign the agreement is one thing but to ensure that we have the required procedures in place had taken a bit of time which had caused a small delay in concluding the accord.

“But what I can assure you is our banks are ready and are now all set and we hope to be able to give complete satisfaction both in terms of American companies that are in Seychelles and also individuals that are operating in Seychelles with regard to the implementation of the Fatca,” Minister Loustau-Lalanne said, noting that it is the country’s aim to in future improve its international standards with regard to anti-money laundering, terrorism financing and of course tax evasion for that matter.

Minister Loustau-Lalanne further said that now if Fatca requires information on present US companies or individuals doing business and holding an account in Seychelles, the ministry is in a position to forward to the American tax authorities information on their transactions as they are well documented.

He said the agreement has nothing to do with Seychelles collecting revenue on behalf of the American government but only to provide information on their business transaction in the country.

According to the minister, there are roughly 10 American businesses operating in the Seychelles.

Noting that the system is effective, Ambassador Reimer said that as of September 2018, prosecutors working with the department of justice were able to secure the conviction for someone who failed to comply with Fatca and the signed agreement directly helps the United States of America.

Ambassador Reimer noted that the signing of the Fatca agreement is sending a signal to the international community about our country’s role as a leading financial hub as we joined a network that includes 61 governments with similar agreements in place, addressing legal impediments while also reducing burdens for financial institutions in Seychelles.

“In the end what it means is that US tax evaders can no longer find a safe harbour in Seychelles,” Ambassador Reimer said.

He extended his gratitude to the Seychelles government for supporting US efforts to combat tax evasion.