From FATCA to GATCA: the move towards global tax information exchange
By Laura Charkin
We are coming to the end of a year that has seen great change in governmental attitudes towards tax information exchange globally. What started off as a US initiative to clamp down on US citizens evading US taxes, by imposing a 30 per cent withholding tax penalty under the Foreign Account Tax Compliance Act (FATCA), has grown and put down new roots across the world.
This alert considers what developments we can expect to see in the year ahead and how this growing movement towards global tax information exchange will affect financial institutions (FIs).
In terms of FATCA itself, there has been notable movement this year in the Asia-Pacific region; Japan has already entered into a Model 2 IGA with the US, Australia is still negotiating a Model 1A IGA with the US and Singapore has expressed its intention to enter into a Model 1A IGA with the US. In the People’s Republic of China, since Sino-US strategic and economic dialogues in July 2013, China has announced that it will commit itself to make its best endeavour to enter into an IGA with the US on the implementation of FATCA, and both parties have undertaken to start a discussion on this in the course of 2013…
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