Thursday 26 July 2012
IMA BACKS THE INTERGOVERNMENTAL AGREEMENT FOR IMPLEMENTING FATCA
In response to the joint statement issued by the governments of UK, France, Germany, Italy, Spain and the United States announcing the publication of the intergovernmental agreement (IGA) for improving international tax compliance and implementation of FATCA (Foreign Account and Tax Compliance Act), Julie Patterson, IMA Director of Authorised Funds and Tax, said:
“We welcome today’s joint statement and the publication of the intergovernmental agreement, which goes some way towards making it easier for our members - and other UK financial institutions - to comply with FATCA.
“IMA has helped the UK government to devise a common approach that will be workable for UK financial institutions and that will not present an insurmountable administrative burden on UK business.
“In particular, IMA's work has ensured that the IGA contains significant improvements to the account documentation requirements. It aligns them more closely with current procedures in the UK and places greater reliance on self-certification of accountholders. Also, the IGA makes clear that there will be no withholding tax on non-US assets in the foreseeable future.
“However, we note the change to the definition of financial institution and will be considering carefully the implication of this.”
The UK, France, Germany, Italy and Spain have all worked jointly on the agreement which replaces the existing proposed FATCA regulations for financial institutions in the countries that choose to adopt it. Financial institutions within scope of the IGA will only need to comply with the agreement, not the FATCA regulations.
The agreement will allow domestic tax authorities to be responsible for supervision of FATCA compliance. This helps to overcome the legal concerns the industry faced with the original proposals put forward by the US Internal Revenue Service (IRS).
Under the IGA, financial Institutions will not need to enter into the Foreign Financial Institutions (FFIs) agreement with the IRS but they will be required to register with the US and obtain a FATCA identification number.
For further information please contact:
Mona Patel, Head of Communications
020 7831 0898 or 07834 089332
Navdeep Sidhu, Press Officer
020 7831 0898 or 07843 517 618
Christina Bridge, Press Assistant
020 7831 0898
About the Investment Management Association
- The IMA is the trade body for the UK's £3.9 trillion asset management industry (retail and institutional) which is one of the world's leading investment management centres.
- Our role is to represent the interests of the asset management industry to government and regulators both in the UK and internationally.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.