Public Consultation on Proposed Regulations to Help Financial Institutions Comply with US FATCA

INTRODUCTION

1. The Ministry of Finance (MOF), Monetary Authority of Singapore (MAS) and the Inland Revenue Authority of Singapore (IRAS) have proposed regulations to help financial institutions in Singapore comply with the US Foreign Account Tax Compliance Act (FATCA). 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, or face a 30% withholding tax on certain gross payments received from the US.

2. To ease the FATCA compliance of financial institutions here, Singapore has substantially concluded a Model 1 Intergovernmental Agreement (IGA)^[1] with the US. The IGA will be signed in the fourth quarter of 2014.

3. MOF, MAS, and IRAS are inviting public feedback on:

4. The public consultation will be from 22 September 2014 to 17 October 2014. More details can be found below.

SCOPE OF THE CONSULTATION EXERCISE

5. The Regulations and the e-Tax Guide set out the reporting regime and include information on the following:

6. The draft Regulations and the e-Tax Guide provide elaboration on how terms used within the IGA apply in the Singapore context. A copy of the Model IGA is attached as Annex to the draft Regulations, to be read where the draft Regulations refer to the IGA. Singapore and the US have substantially concluded discussion on the Singapore-US IGA. The full text of this IGA will be released after it is signed. Where the draft Regulations and e-Tax Guide refer to persons, products and accounts (such as the CPF accounts) that are not found in the Model IGA, you should provide your consultation responses based on their FATCA status and treatment as set out in the draft Regulations and e-Tax Guide.

7. Please note that the e-Tax Guide is not exhaustive in the topics covered, but seeks to convey broad principles which can be applied to different circumstances.

CONSULTATION GUIDELINES

8. We welcome your feedback on the drafting of the Regulations and explanations provided in the e-Tax Guide. Respondents are requested to observe these guidelines when responding to this consultation:

9. These draft Regulations and the e-Tax Guide are released only for the purpose of consultation and should therefore not be used for individual or business decisions, as they do not represent the final regulations or document, and are subject to further changes. All comments received during the consultation exercise will be reviewed thoroughly.

PERIOD OF CONSULTATION

10. The draft Regulations and e-Tax Guide are open for public consultation from 22 September 2014 to 17 October 2014. We regret that comments received after 17 October 2014 will not be considered as they will not be in time for the issuance of the Regulations.

FEEDBACK CHANNEL

11. We strongly encourage all interested parties to submit comments via this email address, FATCA@iras.gov.sg. Comments may also be submitted using the prescribed templates (Singapore Regulations, e-Tax Guide), through:

SUMMARY OF RESPONSES

12. We will publish a summary of the comments received on this website, together with our responses by December 2014. The identity of respondents will not be disclosed in the summary.

DOCUMENTS TO DOWNLOAD

13. For further reference, please click here to download the relevant documents for this public consultation exercise.

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^[1] Under the Model 1 IGA, Singapore-based financial institutions will report information on financial accounts held by US persons to 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 as their reporting obligations would be deemed met once they have transmitted the information to IRAS. More information on FATCA can be found at IRAS’ website here.