On July 13, 2015, the Philippines signed a reciprocal Intergovernmental Agreement (IGA) with the United States to implement the provisions of the Foreign Account Tax Compliance Act (FATCA).
Signed into law in 2010 by US President Barack Obama as part of the US Hiring Incentives to Restore Employment (HIRE) Act, the FATCA aims to obtain information on US persons with offshore income and/or assets to increase compliance with US tax laws.
MANILA, Philippines – Financial institutions were asked to prepare for the effectivity of a US order next year targeted at running after American tax evaders offshore and seen having an impact on their operations. Local and foreign firms transacting with “US persons” will be hit next year by the Foreign Account Tax Compliance Act (FATCA), which orders the charging of taxes against any non-compliant financial institution engaged with US citizens. The Bangko Sentral ng Pilipinas (BSP), in a memorandum, said its supervised institutions – including commercial and investment banks – must “evaluate” if they are covered by FATCA and if applicable, must “establish a policy” to comply. “They are advised to study the potential effects of FATCA to their businesses and determine the necessary steps to take to avoid the unfavorable consequences of non-compliance with FATCA requirements,” said Memorandum 2013-030 dated July 1. FATCA is part of the US’s Hiring Incentives to Restore Employment Act enacted into law in 2010 as part of stimulus measures to boost US economic activity and employment. According to the US Internal Revenue Service (IRS), firms may register between this month until Oct. 25 through its online portal to become “FATCA-compliant.” In doing so, they are agreeing to provide “certain information” to the IRS concerning US accounts they hold. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In addition, US citizens who have foreign assets in excess of $50,000 must report their holdings to the IRS. If they chose not to register though, FATCA Read More …