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Taiwan is an 'Agreements in Substance' nation of FATCA

The Financial Supervisory Commission (FSC, 金融監督管理委員會) yesterday stated that Taiwan is currently recognized by the United States of America as an "Agreements in Substance" nation of the Foreign Account Tax Compliance Act (FATCA).

The status allows Taiwanese financial institutions and their patrons to be exempted from a 30 percent withholding tax on incomes from the United States, as regulated by FATCA. FATCA is a federal law targeted toward American citizens so as to regulate taxation among U.S. taxpayers, making it difficult to conceal assets in offshore shell corporations and accounts. Nations who do not agree to FATCA are subjected to have the 30 percent withholding tax enforced upon their citizens with U.S. incomes and their financial establishment in the U.S. Internationally, FATCA is implemented as an Intergovernmental Agreement (IGA) that is available in two approaches to partnering nations.

Model one asks for financial institutions in partnering countries to agree to report their U.S. accounts to local tax authorities, who will then provide the information to the U.S. Model two requires financial establishments in partner countries to agree to report directly to the American Internal Revenue Service (IRS) while agreeing to lower legal barriers to the reports.

79 Nations Agree to FATCA

According to the U.S. Department of the Treasury, 36 countries including Germany, England and Japan have agreed to FATCA and have since been recognized as IGA partnership nations. Forty-three other countries including Taiwan, South Korea and Singapore have been regarded as "Agreements in Substance" nations that share the same fundamental regulations with IGA countries.

The FSC has stated that Taiwan has opted to select the same model as Japan, model one, as part of FATCA's international approach. As regulated by FATCA, local financial institutions are required to attain a Global Intermediary Identification Number from a website designated by the IRS to be officially registered in the system. Currently, 136 Taiwanese financial institutions including 38 banks have completed their registration.

1 Comment
June 25, 2014    nofatcataiwan@
The FSC is the most disgusting agency! The simply bow down to the US government. Instead of fighting back they just cower and roll over. The US does not recognize Taiwan as a country, why does Taiwan even need to listen to anything the US says? FATCA is a horrible law that will affect 100's of thousands of people in Taiwan immediately after signing this piece of garbage. And then the rest of the country will suffer from an increase in bank charges over the next year or so to cover the cost of FATCA implementation.

Taiwan's government has no idea what they have just done. But it might be funny to watch those politicians that maintain a US citizenship scramble to comply!

FATCA is about as bad as it gets, but the local government seems to think it might be good for them... Amazing!
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