CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Australia, US Begin FATCA Talks

Australia, US Begin FATCA Talks

by Mary Swire,, Hong Kong

12 November 2012

Australia has commenced formal discussions with the US for an inter-governmental agreement that will minimize the impact of the Foreign Account Tax Compliance Act on Australian businesses.

FATCA was enacted by the US Congress in March, 2010. It is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest, at Foreign Financial Institutions (FFIs) including banks, investment funds, insurance companies, foreign trusts and foreign corporations.

FFIs are required to enter into agreements with the US Internal Revenue Service (IRS) and Treasury, to provide such details. Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

According to the Australian Treasurer Wayne Swan, a key objective of the negotiations is to facilitate Australian compliance with FATCA in a way that reduces its overall burden on Australian business. He also anticipates that an inter-governmental agreement would help improve existing reciprocal tax information sharing arrangements between the Australian Taxation Office (ATO) and IRS.

Swan says that the government will work with Australian stakeholders to ensure that their interests are reflected in the discussions.

New Zealand will also shortly begin talks with the US, with the aim of negotiating a FATCA tax information agreement. New Zealand's Revenue Minister Peter Dunne, said of the talks: "Without an inter-governmental agreement, financial institutions would have to enter into separate agreements with the IRS, withhold tax on certain accounts, and risk being in conflict with New Zealand's privacy and human rights laws".

TAGS: compliance | Institutions | tax | investment | business | interest | law | banking | insurance | trusts | investment funds | Australia | offshore | agreements | banking secrecy | New Zealand | United States | Compliance

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »