Singapore and the United States sign agreement to facilitate FATCA compliance by Singapore financial institutions

1. Singapore and the US signed a Foreign Account Tax Compliance Act (FATCA) Model 1 Intergovernmental Agreement (IGA) today, following the initialling of the agreement on 5 May 2014^[1]. The IGA was signed by Deputy Secretary (Policy) of the Singapore Ministry of Finance, Ng Wai Choong and the US Ambassador to Singapore, Kirk Wagar. A copy of the agreement can be found on IRAS’ website^[2].

2. FATCA is a US law which targets non-compliance with tax laws by US persons using overseas accounts. Under FATCA, all financial institutions (FIs) outside of the US are required to regularly submit information on financial accounts held by US persons to the US Internal Revenue Service, or be subject to a 30% withholding tax on certain payments from the US. FATCA will not affect Singapore citizens who have no US tax liabilities.

3. The IGA facilitates Singapore-based FIs’ compliance with FATCA. Without the IGA, individual foreign FIs will have to enter into individual agreements with the US to avoid FATCA-related withholding tax.

4. Under the FATCA IGA, Singapore-based FIs will need to perform due diligence checks to identify financial accounts held by US persons. Thereafter, these FIs will need to transmit information pertaining to such accounts to the Inland Revenue Authority of Singapore, which will in turn transmit the information to the US Internal Revenue Service. Singapore and the US have been discussing a reciprocal FATCA arrangement, under which the US would extend similar cooperation to Singapore.

5. If you have any FATCA queries, please email FATCA@iras.gov.sg

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^[1] Please refer to the earlier Press Release (http://app.mof.gov.sg/news-reader/articleid/101/parentId/59/year/2014?category=Press%20Releases) for more details.
^[2] The IGA can be found at: http://www.iras.gov.sg/irashome/uploadedFiles/Quick_Links/Tax_treaties/FATCA-Singapore_IGA.pdf