Alongside the efforts of the USA to combat tax evasion, Cyprus and the USA have signed the Intergovernmental model 1A agreement (IGA) on December 2nd 2014. The agreement aims to strengthen international tax cooperation for the implementation of the Foreign Account Tax Compliance Act (FATCA). The agreement was signed on behalf of the Republic of Cyprus by the Minister of Finance, Harris Georgiades, and on behalf of the US, the US Ambassador in Cyprus, John M. Koenig.
According the provisions of the agreement, Cyprus ‘tax department of the Ministry of Finance will provide to the US authorities financial information in relation to financial accounts that are held by US persons in Cyprus financial institutions. Reciprocally, the US will provide Cypriot authorities with information regarding US financial accounts held by Cyprus residents in US financial institutions.
US Ambassador John Koenig stated that the collaboration of Cyprus’ public and private sector can help establish the credibility and enhance the profile of Cyprus as a transparent international financial centre for business. Moreover, he noted that the agreement will strengthen the already escellent political and economic relations between Cyprus and the United States of America.
The intergovernmental agreement closely follows the Model I Agreement that was issued in November 2013 by the US Treasury. The signing of the US-Cyprus IGA introduces a Cyprus-specific Annex II, which defines the Cyprus-based entities that can be classified as Exempt Beneficial Owners, Deemed-Compliant Financial Institutions, and Exempt Products.
The agreement defined which entities are obliged to comply with FATCA rules and clarifies which entities might be exempt and/or may have less obligations should they not pose significant risk for US tax evasion.
The implementation of the legislation is expected to be enacted within the coming month.
as posted on 02/12/14 10:44, tsielepis.com.cy
as posted on Tuesday, 2.12.14
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