Public Consultation on Proposed Regulations to Help Financial Institutions Comply with US FATCA
1 The Ministry of Finance (MOF), Monetary Authority of Singapore (MAS) and the Inland Revenue Authority of Singapore (IRAS) have proposed regulations to help financial institutions in Singapore comply with the US Foreign Account Tax Compliance Act (FATCA). FATCA requires all financial institutions outside of the US to regularly submit information on financial accounts held by US persons to the US Internal Revenue Service, or face a 30% withholding tax on certain gross payments received from the US.
2 To ease the FATCA compliance of financial institutions here, Singapore has substantially concluded a Model 1 Intergovernmental Agreement (IGA) with the US. The IGA will be signed in the fourth quarter of 2014.
3 MOF, MAS, and IRAS are inviting public feedback on:
the draft Income Tax (International Tax Compliance Agreements) (United States of America) Regulations 2014, which sets out the due diligence and reporting obligations of Singapore-based financial institutions in relation to the FATCA IGA; and
a draft FATCA e-Tax Guide, which provides further explanation of those obligations.
4 The public consultation will be from 22 September 2014 to 17 October 2014. More details can be found on MOF’s website.
1Under the Model 1 IGA, Singapore-based financial institutions will report information on financial accounts held by US persons to IRAS, which will in turn provide the information to the US IRS. Transmitting this information through IRAS helps to ease the compliance burden for our financial institutions as their reporting obligations would be deemed met once they have transmitted the information to IRAS. More information on FATCA can be found at IRAS’ website http://www.iras.gov.sg/irasHome/page.aspx?id=15664.