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Guernsey, Jersey & Isle of Man to strike FATCA deals with US

(Dubai, 11/10/2012) The governments of Guernsey, Jersey and the Isle of Man have simultaneously announced that they are seeking to negotiate partnership agreements with the United States to implement the Foreign Account Tax Compliance Act (FATCA).

The intention is that the three British Crown Dependencies will negotiate their own individual agreements which will follow the model intergovernmental agreement published by the US government on July 26 and will be similar in form to the agreement between the United Kingdom and the US signed on September 12.

A statement from the Guernsey Government said that discussions have taken place at official level between the Crown Dependencies jointly and the US government, and formal negotiations will now take place with the intention of concluding intergovernmental agreements rapidly.

Once signed, they will be subject to ratification by each of the island parliaments and implementation of the agreements will be through the domestic procedures relevant to each of the three jurisdictions.

Enacted by Congress in March 2010, FATCA’s provisions are intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers with foreign financial institutions (FFIs). Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

FFIs with US clients will be required to report basic account details for 2013 and 2014 by January 1, 2015, but it is currently envisaged that the income of those clients will not need to be reported until January 1, 2016, with respect to calendar year 2015.

The impact on UAE based FFIs is: HSBC Middle East Ltd. is regulated by the Jersey Financial Services Commission. Standard Chartered and Barclays are UK regulated so or so.

 

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