Singapore Releases e-Tax Guide to Help Financial Institutions Comply with FATCA
SINGAPORE – Singapore’s Ministry of Finance, the Monetary Authority of Singapore, and the Inland Revenue Authority of Singapore (IRAS) have issued a draft e-Tax Guide that is intended to help financial institutions (FIs) in Singapore comply with the United States Foreign Account Tax Compliance Act (FATCA).
Additionally, in order to further aid FIs, Singapore has concluded a Model 1 Intergovernmental Agreement (IGA) with the US, which sets out the due diligence and reporting obligations of Singapore-based FIs in relation to the FATCA IGA, and the draft FATCA e-Tax Guide. The full text of the IGA is scheduled to be made publicly available on or around October 17, 2014.
FATCA requires all FIs outside of the US to submit regular information on financial accounts held by US persons to the US Internal Revenue Service (IRS), or face a 30 percent withholding tax on certain payments of US-sourced income.
Importantly, FIs within a Model 1 IGA jurisdiction in Singapore will have until December 22, 2014 to register themselves at the IRS online FATCA Registration Portal and obtain a Global Intermediary Identification Number. FIs must complete this procedure before the deadline in order to ensure their inclusion on the IRS Foreign FI List by January 1, 2015. The deadline for annual information reporting to IRAS is May 31, starting in 2015 for the first FATCA reporting year of 2014.
Among the information included within the IGA draft regulations and the e-Tax Guide are:
- Information on the financial institutions that must report
- The account holders and financial accounts that are subject to reporting
- Exempt financial institutions, account holders and financial accounts
- The due diligence procedures required to identify the reportable accounts
- The information to be reported
- The timelines for reporting the requisite information to IRAS
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