St. Kitts and Nevis (WINN); The proposed House Bill 3419 in the state of Illinois has listed St. Kitts and Nevis as a “foreign tax haven” and if the bill is successful, the federation will be among 18 Caribbean countries where a company incorporated in any of those nations would be forbidden from submitting a bid or entering into a contract with the state.
The Expatriate Corporation/Foreign Haven act or HB 3419 was introduced in the Illinois General Assembly on February 9 by Senator Jaime Andrade Jr. and has now been listed on Calendar order for its third reading.
Ambassador Dr. Everson Hull, St. Kitts and Nevis’ Permanent Representative to the Organization of American States (OAS) has expressed his concern with the federation being branded a tax haven.
He said, “The designation of St. Kitts and Nevis as a tax haven is factually incorrect. The bill defines a tax haven as a jurisdiction where there is low or no taxation. Upon reflection, this definition is neither necessary nor sufficient for assigning the pejorative tax haven designation.
“A tax haven is a jurisdiction where taxes are hidden. That is not the case for St. Kitts and Nevis.”
Ambassador Hull said under the new administration government, there has been full cooperation between the government of St. Kitts and Nevis and the USA to ensure that taxes due are disclosed to the U.S. Internal Revenue Service (IRS).
“Deliberate steps have been taken to ensure that St. Kitts and Nevis is compliant with the most recent international standards regarding tax transparency and exchange of information set forth by the Global Forum on Transparency and Exchange of Information for tax purposes initiated by the OECD and the Financial Action Task Force.”
Dr. Hull pointed out that in its November 2016 peer review assessment of St. Kitts and Nevis' compliance, the OECD’s Global Forum rated the federation as being "largely compliant" and in a number of areas “fully compliant”.
He said, “This is significant as it means that St. Kitts and Nevis is viewed by the international community through the agency of the Global Forum as playing its part in the international financial system in a mature and responsible manner.
“Labeling our country pejoratively as a tax haven only serves to exacerbate the existential threats to our economy posed by this recent phenomenon of de-risking. The Federation of St. Kitts and Nevis presents no financial risk to the State of Illinois that would adversely affect the flow of tax to the State.”
St. Kitts and Nevis is among several Caribbean nations that have adopted US legislation as it relates to combatting tax evasion by US players.
The Foreign Account Tax Compliance Act (FATCA), enacted by the United States in 2010, is geared towards combating tax evasion by U.S. taxpayers holding assets in foreign countries.
FATCA requires Foreign Financial Institutions (FFIs) to report to the IRS information on assets held by U.S. tax payers, or by foreign entities in which U.S. taxpayers hold substantial ownership interest.
St. Kitts and Nevis passed FATCA legislation in the National Assembly on September 15th, 2015.