One point in the document imposes a duty on Singaporean financial institutions to report the “required information of every US-reportable account” on a yearly basis.
The regulator has also opened an industry consultation on the proposals for the coming month running from 22 September until 17 October.
The consultation is centred on the regulator’s draft Income Tax Regulations 2014 and draft FATCA e-Tax Guide, which are both intended to make it easier for Singapore’s financial institutions to comply with the US Foreign Account Tax Compliance Act.
The proposals, which were created in conjunction with the Ministry of Finance and the Inland Revenue Authority of Singapore, form the jurisdiction’s model 1 intergovernmental agreement (IGA) with the US.
One point in the consultation document says a reporting Singaporean financial institution must “prepare and provide to the Comptroller a return setting out the required information in relation to every U.S. reportable account that is maintained by the institution at any time during the calendar year in question.”
FATCA requires all financial institutions outside of the US to regularly submit information on financial accounts held by US persons to the US Internal Revenue Service.
Failure to adhere to the act’s requirements could result in a 30% withholding tax on certain gross payments received from the US.
The MAS said the two documents set out the reporting regime and include information on the following:
- 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.
In July, FATCA’s withholding stage was introduced around the world, after many jurisdictions signed IGAs in anticipation of their compliance in the preceding months.
An IGA makes it easier for partner countries to comply with the provisions under FATCA by relaxing deadlines and increasing clarity and simplicity around due diligence with country specific provisions.
Click here for a comparison between IGA model 1 and 2.
