Seychelles Signs US FATCA Agreement

by Mike Godfrey, Tax-News.com, Washington

16 July 2019

On July 3, 2019, the Seychelles Government announced that it has signed an intergovernmental agreement (IGA) with the United States to implement the requirements of the US Foreign Account Tax Compliance Act (FATCA).

FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the IRS obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.

Under the Model 1 IGA signed by the Seychelles and the US, FFIs in the foreign jurisdiction are required to report tax information about US account holders directly to the government, which will in turn relay that information to the US Internal Revenue Service.

The Seychelles and the US previously had a FATCA agreement in substance, which was treated as having entered into effect on June 30, 2014.

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