Regional Adoption on Pace with Europe as Singapore Signs Agreement
Experts at Wolters Kluwer Financial Services today issued guidance on the Foreign Account Tax Compliance Act in an effort to help support banks’ regulatory compliance efforts within the region. The commentary comes in reaction to the news last week that Singapore and the U.S. have just signed an Intergovernmental Agreement on FATCA. The IGA signifies the Monetary Authority of Singapore’s commitment to improving the overall framework on international tax cooperation.
The aim of FATCA is to detect, deter and discourage offshore tax abuse by U.S. citizens and companies.
While Asian jurisdictions have been slow to adopt other prescriptive rules-based regulations, Singapore’s signing of the FATCA IGA follows closely on the heels of similar action by Hong Kong, which signed the agreement on Nov. 14. Cambodia, Macao and the Philippines reached “agreements in substance” also in November, bringing the number of countries in the region with similar agreements in place to fifteen. This rapid adoption demonstrates the degree to which FATCA is being taken seriously in the region.
To ensure compliance within the timelines outlined by the Inland Revenue Authority of Singapore (IRAS), the following immediate steps are needed:
- Register with the U.S. Internal Revenue Service and obtain a Global Intermediary Identification Number by Dec. 22, 2014
- Report FATCA data in XML format starting May 31, 2015
“FATCA reporting and compliance will be a huge burden not only on banks in Singapore, but across the region,” said Wouter Delbaere, strategy manager, Compliance Solutions with Wolters Kluwer Financial Services. “Banks that take a comprehensive approach and are able to implement in a manner that not only meets external compliance, but also generates greater transparency internally, will create a competitive advantage over the long term.”
“Banks that invest in upgrading their existing infrastructure to collect the additional information required by regulators, while simultaneously consolidating and centralizing existing information will be best positioned to thrive in this new global regulatory environment,” Delbaere added.
As the global market leader of regulatory compliance solutions, Wolters Kluwer Financial Services empowers financial institutions to meet compliance needs while reducing regulatory risk. Their technology solutions allow banks to focus efforts on decision support rather than the tedious and risky task of manual report production.