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The Seychelles Revenue Commission (SRC) has announced that the system enabling financial institutions to report information about their American clients under the United States Foreign Account Tax Compliance Act (FATCA) went live on July 31, 2015, although it is not yet possible for FIS s to upload the necessary data.
In an earlier circular dated April 2015, the SRC informed FIs that they will be required to transmit financial account information to the US Internal Revenue Service by September 30, 2015. Therefore, affected financial institutions were to report financial account information by no later than June 30, 2015, in the form of a data file compiled in accordance with FATCA XML v1.1 schema.
In an information notice issued to FIs registered for FATCA purposes, the SRC said that while the information portal was launched on July 31, the uploading of the reportable information will "not be possible at this stage." FIs were told to continue to collect the relevant data, ready for transmission to the SRC on a date "that will be communicated in future."
FATCA requires all FIs outside the United States to submit regular information on financial accounts held by US persons to the IRS, or otherwise they will face a 30 percent withholding tax on certain payments of US-sourced income.
To address situations where foreign law would prevent an FFI from complying with the terms of an FFI agreement, the United States Treasury Department has developed three model intergovernmental agreements (IGAs). The Seychelles has signed a Model 1 IGA, under which FIs report tax information about US account holders directly to the local revenue authority, which will in turn relay that information to the IRS.
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