UK and International Tax news
UK Signs Agreements For Automatic Information Exchange With Guernsey and Jersey
Thursday 31st October 2013
The UK has published Intergovernmental Agreements [IGAs] to improve international tax compliance that were signed with both Guernsey and Jersey on 22 October 2013.
With the introduction in the US of their Foreign Account Tax Compliance Act [FATCA], the UK government, along with France, Germany, Italy, and Spain and with the support of the EC, took part in joint discussions with the US government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. A model IGA was developed and published in July 2012.
The UK and the US subsequently signed an IGA – the ‘UK-US Agreement to Improve International Tax Compliance and to Implement FATCA’ – in September 2012.
The IGA is supposed to reduce some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws. Under the IGA, financial institutions pass information to HMRC who will then automatically exchange this information with the IRS.
The UK government stated that it would look to sign further agreements with other jurisdictions as part of their commitment to combat tax evasion. The Crown Dependencies (Isle of Man, Guernsey and Jersey) and the British Overseas Territories (the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, Turks and Caicos Islands, Montserrat and Gibraltar) all agreed to enter into automatic tax information exchange agreements with the UK.
The UK and the Isle of Man signed an IGA – the ‘UK-Isle of Man Agreement to Improve International Tax Compliance’ – on 10 October 2013 and this was the first agreement of this type to be signed and published where neither party is the USA.
Guernsey and Jersey have also now signed IGAs with the UK [the ‘UK-Guernsey Agreement to Improve International Tax Compliance’ and the ‘UK-Jersey Agreement to Improve International Tax Compliance’] which means that all the Crown Dependencies have now entered into automatic tax information exchange agreements with the UK.Contact Us