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Italy Consults On FATCA Agreement With US

by Ulrika Lomas, Tax-News.com, Brussels

28 April 2014


On April 23, the Italian Ministry of the Economy and Finance began a consultation on the terms of the inter-governmental agreement (IGA), signed on January 10 this year, for the implementation of the Foreign Account Tax Compliance Act (FATCA) between Italy and the United States.

FATCA, enacted by Congress in 2010, is due to take effect on July 1, 2014, and is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients, including account ownership, balances and amounts moving in and out of the accounts, will result in a requirement to withhold 30 percent tax on payments of US-sourced income.

To address situations where foreign law would prevent an FFI from complying with the terms of an FFI agreement, Treasury has developed model IGAs. Under the terms of the Model 1 IGA between Italy and the US, Italian FFIs will be required to report their information to the Italian Revenue Agency, which will then automatically exchange the information with the US.

The legislative framework for the Italian ratification of the IGA therefore anticipates, in particular, that the Ministry will issue decrees to set up the various formalities involved in the collection of the required financial data, in addition to specifying the timing of its transmission to the Italian Revenue Agency.

All interested Italian stakeholders are requested to send their comments on all, or particular clauses, of the FATCA IGA by May 8, 2014.

TAGS: compliance | Finance | Foreign Account Tax Compliance Act (FATCA) | tax | tax compliance | FATCA | law | banking | financial services | legislation | withholding tax | Italy | United States | services | Compliance | Tax

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