UK and International Tax news
Consultation On UK-US FATCA Agreement
Thursday 27th September 2012
Further to the previous announcement by HMT on the recently signed agreement with the US to improve international tax compliance and implement FATCA [see our International News item of 16 September 2012], HMRC has now issued a consultative document which sets out how the Government intends to legislate to deliver the commitments made in the Agreement and seeks views on the proposed approach. It also requests information on the expected costs of complying with the Agreement to inform the impact assessment.
The objective of the condoc is to consult on implementing the Agreement into UK law, and the content and consultation questions focus solely on aspects requiring implementation in the UK and not, for example, the requirements placed on US financial institutions by the US.
The UK-US agreement is closely based on the Model Agreement, and addresses legal barriers to financial institutions complying with FATCA, ensures that withholding tax will not be imposed on income received by UK financial institutions or on payments they make, ensures that the burdens imposed on financial institutions are proportionate to the goal of combating tax evasion, and establishes a reciprocal approach to FATCA implementation.
Once the consultation process has been completed after consideration of the comments received, the Government will publish draft legislation for comment.
Final legislation will be put forward as part of the FB2013 process. The Government has also said that it will continue to seek views from business on the practical aspects of implementing the Agreement, such as the necessary reporting and systems requirements, which have not yet been finalised with the US.
Where possible, the Government would like to ensure that any process changes brought about by the Agreement are aligned with both present and future reporting requirements. This may mean that detailed aspects of the requirements will not necessarily be set out in the legislation introduced in FB2013. However, the requirements will be made available in sufficient time to allow business to comply with their obligations under the Agreement.Contact Us