Nevis reporting and information exchange

CRS duties in St. Kitts and Nevis

St. Kitts and Nevis describes CRS as a mandatory framework for financial institutions to identify certain accounts and report information for exchange with partner jurisdictions. Its domestic Act and Regulations establish the reporting framework and name the Inland Revenue Department as the Competent Authority.^[2]

A Reporting Financial Institution is a financial institution in the reporting jurisdiction that is not classified as a Non-Reporting Financial Institution.^[2]

Financial institutions conduct due diligence using account review and self-certification, identify reportable accounts and report information annually to the IRD. The reportable account definition includes accounts held by tax residents of a reportable jurisdiction, and certain passive entities with controlling persons resident there.^[2]

Where an entity holds an account, a financial institution identifies its controlling persons and determines their tax residence. For a trust, controlling persons can include a settlor, trustee, protector or beneficiary.^[2]

• Reported fields include account-holder name, address, tax-residence jurisdiction and tax identification number.^[2]
• Other reported fields include date of birth for individuals, account number, account balance or value, and income generated.^[2]
• Reports are due annually by May 31 after the reporting period and are submitted electronically through the IRD's AEOI Portal.^[2]

The jurisdiction describes CRS as an automatic exchange of financial-account information between tax authorities. St. Kitts and Nevis began exchanges using earlier reporting data, and its framework includes domestic legislation and OECD due-diligence procedures.^[2]

FATCA agreement status

FATCA calls for foreign financial institutions to report information to the IRS about accounts held by U.S. taxpayers, or by certain foreign entities with substantial U.S. ownership. St. Kitts and Nevis has a Model 1 FATCA intergovernmental agreement that is In Force.^[3]

Nevis service providers and beneficial owners

Nevis's financial services regulator describes licensing classes for trust and corporate service providers. A restricted Class II licence covers registration and registered-office services for trusts, while an unrestricted Class II licence also permits trust business.^[1]

The regulator says licensing applicants submit forms and supporting documents for review by the Licensing Committee. It also describes due-diligence investigations and fit-and-proper assessments for applicants' principals, shareholders, beneficial owners and directors.^[1]

Nevis rules address beneficial owner checks for service provider applicants and licensing of foreign beneficial owners and directors of local companies under a separate statute.^[1]

IRS reporting for U.S. persons

The IRS defines a U.S. person to include a U.S. citizen or resident. Information reporting can apply to a U.S. person who has a transaction with a foreign trust, is treated as its owner under grantor-trust rules, or receives a distribution.^[5]

Form 3520 is used for specified transactions with foreign trusts, ownership under the grantor-trust rules and certain gifts or bequests. The instructions say a U.S. person treated as owner of any part of a foreign trust's assets completes Part II, including when there were no trust transactions during the tax year.^[6]

A U.S. person who receives a foreign-trust distribution may have a Form 3520 filing obligation. The IRS also lists a U.S. owner's responsibility to ensure the foreign trust files Form 3520-A and provides annual statements; if the trust does not file, the owner completes and attaches a substitute form to a timely Form 3520.^[5]

Form 3520 is generally due on the 15th day of the fourth month after the taxpayer's tax year ends, subject to applicable exceptions and extensions. The IRS instructions state that Form 3520-A is due on the 15th day of the third month after the foreign trust's tax year ends; extensions may apply. When that day falls on a weekend or legal holiday, the due date moves to the next business day. They also state that a substitute Form 3520-A attached to Form 3520 is due on the Form 3520 due date.^[6]

The IRS identifies Form 8938 as a possible report for specified foreign financial assets when the total value of assets in which a person has an interest exceeds applicable thresholds. FBAR reporting can apply to a financial interest in or signature authority over a foreign financial account, including a trust account.^[5]

These reporting regimes have distinct filing triggers. The IRS says exceptions from Forms 3520 and 3520-A do not affect any applicable Form 8938 or FBAR reporting obligation.^[5]

Nevis and U.S. tax agreements

St. Kitts and Nevis is not included in the IRS list of jurisdictions with a U.S. income tax treaty. U.S. income tax treaties can provide reduced rates or exemptions for specified types of income in specified circumstances, including certain foreign-source income.^[4]

Treasury lists St. Kitts and Nevis as having a Model 1 FATCA intergovernmental agreement that is In Force. FATCA requires foreign financial institutions to report information to the IRS about accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest. Institutions may register directly with the IRS under FATCA regulations or comply with intergovernmental agreements treated as in effect in their jurisdictions.^[3]

A Model 1 IGA governs financial institutions' compliance with FATCA reporting requirements and does not establish a U.S. income tax treaty.^[3][4]

Separately, the IRS says U.S. persons who create a foreign trust or have transactions with one can have U.S. income tax consequences and information reporting requirements. A U.S. person includes a U.S. citizen or resident. Depending on the relationship with a foreign trust, reporting can include Forms 3520 and 3520-A, Form 8938, or FinCEN Form 114. Form 3520 is generally required for a U.S. person who creates or transfers property to a foreign trust, receives a distribution or loan from one, or is treated as its owner under grantor trust rules. Form 3520-A is the annual information return for a foreign trust with a U.S. owner.^[5]

Questions and answers

Related resources

Related glossary terms

• Section 6048: Section 6048 sets information reporting rules for certain foreign trusts. Its parts cover notice of events, U.S. owner duties and beneficiary distributions.
• Intergovernmental agreement: An intergovernmental agreement appears in FATCA rules for foreign financial institutions. Form 8938 instructions also use the term for certain foreign accounts.
• Foreign grantor trust: A foreign grantor trust is a foreign trust treated as owned by a grantor, often a U.S. person. Ownership brings Form 3520 and Form 3520-A reporting duties.

Related articles and guides

• Seychelles information exchange and U.S. trust reporting: Seychelles CRS and FATCA frameworks, beneficial ownership materials and IRS rules for U.S. citizens who own or benefit from foreign trusts, set out together.
• Switzerland reporting and foreign trust rules: Switzerland exchanges account information under AEOI and FATCA arrangements, with Swiss trustee rules and IRS reporting for foreign trusts set out alongside.
• Jersey information exchange and U.S. trust reporting: Jersey sets CRS filing formats and the duties of reporting institutions, with separate FATCA and CRS reports and IRS foreign trust reporting for U.S. persons.

Tools and official documents

• FATCA agreement lookup: Look up any jurisdiction in the U.S. Treasury FATCA table and see its agreement model and status as the Treasury lists them, with a link to the source.

Related pages

• Nevis (Saint Kitts and Nevis): overview: Start page for this jurisdiction.
• Trust legislation
• Types of trusts
• Trustee regulation and licensing
• Taxation of trusts