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Agreement to Facilitate Compliance by Singapore Financial Institutions with US Tax Laws

6 May 2014

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Logos: MOF, Monetary Authority of Singapore(MAS), Inland Revenue Authority of Singapore.


Singapore and the US have substantially concluded discussions on an Intergovernmental Agreement (IGA) that will facilitate compliance with the US Foreign Account Tax Compliance Act (FATCA) by Singapore-based financial institutions. The two countries have initialled a Model 1 IGA.

2. FATCA is a US law which targets non-compliance with tax laws by US persons using overseas accounts. Under FATCA, all financial institutions outside of the US are required to regularly submit information on financial accounts held by US persons to the US Internal Revenue Service (IRS).

3. Under the Model 1 IGA, Singapore-based financial institutions will report information on financial accounts held by US persons to the Inland Revenue Authority of Singapore (IRAS), which will in turn provide the information to the US IRS. Transmitting this information through IRAS helps to ease the compliance burden for our financial institutions[1] as their reporting obligations would be deemed met once they have transmitted the information to IRAS.

4. Following the initialling of the IGA, the parties expect to sign the agreement in the second half of 2014. Singapore-based financial institutions will have until 31 December 2014 to register as a Foreign Financial Institution within a Model 1 IGA jurisdiction and obtain a Global Intermediary Identification Number at the US IRS’ online FATCA registration portal[2]. This will ensure that there is no FATCA-related withholding tax on payments made to them from the US.

ISSUED BY
MINISTRY OF FINANCE
MONETARY AUTHORITY OF SINGAPORE
INLAND REVENUE AUTHORITY OF SINGAPORE


[1] More information on FATCA can be found at IRAS’ website http://www.iras.gov.sg/irasHome/page.aspx?id=15664.

[2] The US IRS’ online FATCA registration portal can be found at: https://sa2.www4.irs.gov/fatca-rup/. More FATCA registration resources and support information can be obtained at: http://www.irs.gov/Businesses/Corporations/FATCA-Registration.

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