New IRS laws could hurt Caribbean tourism industry
NASSAU, Bahamas, – The Bahamas Hotel and Tourism Association (BHTA) has flagged a potentially crippling development within the United States tax legislation that could have far reaching implications for hoteliers and tourism attractions across the Caribbean.
According to the Nassau Guardian, the BHTA has brought to the urgent attention of the Caribbean Hotel and Tourism Association the fact that US credit card companies have been mandated to implement an automatic 28% withholding fee unless the merchant receiving the payment is compliant with new Inland Revenue Service (IRS) regulations.
In a far-reaching action reminiscent of the new Foreign Account Tax Compliance Act (FATCA) regulations with which many financial institutions across the region must now comply, the new rules added to the US Tax Code in January 2012 means that credit card processing companies must collect and verify the tax identification number (TIN) and legal name associated with that number for each merchant customer.
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