India may sign US Foreign Account Tax Compliance Act in July

New Delhi, June 26 (IANS) India is likely to sign the US’ Intergovernmental Agreement (IGA) for Foreign Account Tax Compliance Act (FATCA) early next month, a senior official has said.

FATCA requires all financial institutions outside of the US to periodically transmit information on financial accounts held by Americans to the US Internal Revenue Service, or face a 30 percent withholding tax on payments made from the US.

“The Indian government is likely to sign the Intergovernmental Agreement for Foreign Account Tax Compliance Act in early July 2015,” Joint Secretary, Finance, Akhilesh Ranja said at a roundtable here organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement on Friday.

FATCA is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by Americans.

Ranjan said the government is committed to the confidentiality of data and is taking several measures to ensure it.

“A security committee has been set up within CBDT (Central Board of Direct Taxes) headed by the chief information security officer for security of documents and information,” he said

“Internal systems are being devised so that the distribution of information is channelised and there is no general distribution of information,” he added.

FATCA compliance will necessarily have to cover all new accounts opened by Indian financial institutions (FIs) from July 1, 2014 onwards,” FICCI said.

“Further, FIs would be obliged to share data with the government in respect of all new accounts opened from July 1 till December 31, 2014, to enable the government to share this data with the US by September 30, 2015,” it added.

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