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Australia and the United States have today signed an intergovernmental agreement (IGA) to reduce the burden on Australian financial institutions in complying with the United States’ Foreign Account Tax Compliance Act (FATCA).
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Australia, US sign tax agreement
28 April 2014
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FATCA is an information-reporting regime enacted by the United States in March 2010. It will commence on 1 July 2014 and will affect a large part of the Australian financial services sector.
Treasurer Joe Hockey said the conclusion of the treaty-status IGA will help Australian businesses comply with FATCA.
“It reduces the overall burden on Australian business, minimises costs by simplifying due diligence requirements and broadens arrangements between the Australian Tax Office and the US Internal Revenue Service,” he said.
“The IGA will also improve existing tax information-sharing arrangements between Australia and the United States for the purpose of preventing tax evasion. This will help to enhance the integrity of both countries’ tax systems.”
Mr Hockey said the government will introduce legislation to give effect to the IGA as soon as practicable and public consultation will commence immediately on the draft legislation and its explanatory memorandum.
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