Barbados has signed a Foreign Account Tax Compliance Act (FATCA) agreement with the US for the implementation of global standards for regulating the international business and financial services sector.

The pact was signed by Barbados minister of industry, international business, commerce and small business development, Donville Inniss and co-initialled by ambassador to Barbados, Larry Palmer, at the US Embassy, reported NationNews Barbados.

"The signature of this FATCA agreement is an indication of the transformation of how we interact with our clients and apply greater due diligence in an ever-changing environment," Inniss said.

The FATCA agreement aims to boost the country’s regulatory framework.

The accord will also improve international tax compliance as well as combat offshore tax evasion.

Inniss said that the signing was not a deviation from Government’s belief that businesses and investment must be allowed the flexibility to thrive.

"By working together to detect, deter and discourage offshore tax abuses through increased transparency and enhanced reporting, we can help to build a stronger, more stable and accountable global financial system," Palmer said.

The FATCA law, which was enforced by Congress in 2010, requires information reporting and withholding tax provisions that target non-compliance by US taxpayers using foreign accounts.