US Inks Model 1 Inter-Governmental Tax Agreement With Singapore

Stephen Little

6 May 2014

Singapore has become the latest country to reach an agreement with the US to implement the Foreign Account Tax Compliance Act.

The deal has been agreed in substance and is expected to be completed in the second half of 2014, the Singapore Ministry of Finance said in a statement.

Under the Model 1 Inter Governmental Agreement, Singapore-based financial institutions will be required to report tax information about US account holders directly to the Inland Revenue Authority of Singapore, which will relay that information to the US Internal Revenue Service.

FATCA is set to take effect on July 1 and requires all financial institutions outside of the US to regularly submit information on financial accounts held by US persons to the IRS.

Model 1 IGA (issued in July 2012) highlights and benefits include: a relaxation of deadlines; simplified due diligence; and increased clarity around due diligence with country specific provisions, as stated on the Thomson Reuters website.

A total of 28 countries have now signed tax treaties with the US in connection with FATCA, including the UK, Canada, Ireland, Germany, France, the Netherlands, Switzerland and Italy.