Bermuda Signs FATCA IGA With US
by Mike Godfrey, Lowtax.net, New York
24 December, 2013
Bermuda signed an intergovernmental agreement with the United States on the implementation of the Foreign Account Tax Compliance Act (FATCA) on December 19, 2013.
The agreement requires foreign financial institutions (FFIs) to identify and annually report key information about US account holders directly to the US Internal Revenue Service (IRS), and those that fail to comply will face a 30 percent withholding tax on certain US source payments, such as interest payments. The agreement builds on a bilateral tax information exchange agreement which Bermuda and the US signed in 1988.
US Consul General Settje, who signed on behalf of the United States, welcomed the agreement, saying that it "continues the long tradition of friendship and collaboration that marks the United States-Bermuda relationship. Together we can improve international tax transparency and compliance by further building on that relationship."
Bermuda's minister of finance, Bob Richards, pointed out at the signing that the British Overseas Territory currently now has 41 bilateral Tax Information Exchange Agreements (TIEAs) in place worldwide, and has multilateral agreements that may lead to tax cooperation agreements with 60 jurisdictions.
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