1.1. Model Intergovernmental Agreement for the implementation
of FATCA
The Government has issued a joint statement with the governments
of France, Germany, Italy, Spain and the United States, announcing
the publication of the Model Intergovernmental Agreement to Improve
Tax Compliance and to Implement FATCA. This is a key step towards
delivering on the commitment to an intergovernmental approach to
implementing the US Foreign Account Tax Compliance Act (FATCA) made
by the same countries in their joint statement published on 8
February 2012.
As set out in the 8 February joint statement, the UK Government
aims to address the legal barriers to complying with FATCA, ensure
the burdens imposed on financial institutions are proportionate to
the goal of combating tax evasion and establish a reciprocal
approach to FATCA implementation.
More specifically, the Model sets out a framework within
which:
the legal barriers to compliance, such as those related to data
protection, have been addressed;
withholding tax will not be imposed on income received by UK
financial institutions;
UK financial institutions will not be required to withhold tax
on payments they make;
the due diligence requirements are more closely aligned to the
requirements under the existing anti-money laundering rules;
there is a wider scope of institutions and products effectively
exempt from the FATCA requirements; and
HMRC will receive additional information from the US IRS to
enhance its compliance activities.
2.2. Minutes of the Employment-Related Securities Forum
The minutes of the Employment-Related Securities (ERS) Forum
meeting held on 14 May have been published.
The ERS Forum facilitates an open dialogue between HMRC and
representative bodies on a range of operational, product and
process issues relating to tax and employment-related shares and
securities. Through a network of joint sub-groups, it will also
provide for closer working and problem solving between
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