May 3rd, 2012 by Stephanie Erickson
Ireland recently joined several other European countries in talks with the U.S. concerning FATCA tax regulations. Beginning in February, five other countries – UK, France, Germany, Italy, and Spain began an agreement to comply with U.S. FATCA regulations which will start taking place in January 2013. Under this intergovernmental agreement, foreign financial institutions will send data on American account-holders to its respective country’s government. Then, the government will send the information onto the U.S., and specifically, the IRS. In creating the FATCA regulations, the U.S. government and the IRS are hoping to eliminate tax evasion by Americans through offshore bank accounts.
A statement released by the Irish Funds Industry Association said Irish Revenue Commissioners “confirmed that they are in contact with the U.S. Treasury and discussions are ongoing.” The FATCA agreement is expected to be in place by June 2012. This “model agreement” would “not alter or amend the obligation to identify or report certain information under FATCA, but outline an alternative pathway for reporting FATCA information,” said the IFIA.
Given Ireland’s large funds management industry, its willingness to enter a FATCA agreement with the U.S. is significant for the IRS. An eventual global move towards compliance and regulations (such as FATCA) would also be good for Ireland, says IFIA spokeswoman, Angela Madden. Because of its existing regulatory infrastructure and “regulation-ready product solutions,” the widespread change could benefit Ireland.
IFIA Chairman, Ken Owens said that intergovernmental agreements are “welcome news for an industry which operates on a multi-jurisdictional basis” as information would be exchanged on a consistent basis, rather than individually and disorderly. In addition to the countries already involved, and now Ireland, Israel is also reportedly considering a FATCA deal with the U.S. Although foreign cooperation seems to be growing, these changes are only being implemented at the governmental level thus far, so it’s still unclear exactly what FATCA regulations could mean for organizations in each country. Ultimately, the future of FATCA remains unknown, so stay tuned 1099 News as the details unfold.
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