The US and Singapore have completed their negotiations in respect of an intergovernmental agreement (IGA) to allow institutions in Singapore to carry out the provisions of the Foreign Account Tax Compliance Act (FATCA). The FATCA requires the IRS to obtain details of the accounts of US persons with foreign financial institutions (FFIs). The FFIs will be subject to a requirement to withholding 30 percent tax on payments of US source income if they do not disclose the relevant data about their US clients.
The provisions of the IGA will make it possible for the financial institutions to fulfil their FATCA obligations by transmitting the relevant information to the Singapore tax authority IRAS. The agreement is expected to be signed later in 2014 and the FFIs will have until 30 December 2014 to register and obtain an identification number through the FATCA online portal.
The Ministry of Finance, IRAS and the Monetary Authority of Singapore will provide guidance later in 2014 to help FFIs comply with the requirements of FATCA. A consultation is to be held on the draft guidance.
