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Singapore Nears FATCA Agreement With US

by Mary Swire, Tax-News.com, Hong Kong

14 November 2013


Following his meeting in Singapore with United States Treasury Secretary Jacob Lew, Tharman Shanmugaratnam, Singapore's Deputy Prime Minister and Minister For Finance, stated that bilateral discussions to conclude a Foreign Account Tax Compliance Act (FATCA) inter-governmental agreement (IGA) are progressing smoothly.

FATCA, enacted by Congress in 2010, 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 on US financial institutions to withhold 30 percent tax on US-source 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. It is expected that Singapore and the US will conclude their agreement over the next few months, with Lew and Shanmugaratnam agreeing that the two sides "should work towards reciprocity of information exchange under FATCA."

In his statement, Shanmugaratnam also noted that the signing of the FATCA IGA between the US and Singapore will "underscore Singapore's preparedness to engage in automatic exchange of information as long as it is undertaken on a level playing field basis with regard to all financial centers and is undertaken with countries that respect the rule of law with regard to confidentiality of information."

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

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