Spain, US Seal FATCA Deal
17 May 2013
Posted by: Author: Ulrika Lomas
Source: Ulrika Lomas (Tax-News.com, Brussels)
Spain's Finance Minister Cristóbal Montoro and US Ambassador to Spain Alan Solomont have recently signed an agreement between Spain and the US, designed to improve international fiscal compliance and implementing the Foreign Account Tax Compliance Act (FATCA).
Approved at the end of last year, the accord between Spain and the US provides that financial institutions in both countries must provide their tax authorities with information relating to taxpayers of the other signatory state. This information will subsequently be exchanged automatically between the tax authorities through a standardized procedure.
Defending the treaty, the Spanish Finance Ministry highlighted the fact that "the agreement constitutes a milestone in the exchange of tax information at an international level, by laying the foundations for a new automatic, recurrent and standardized framework of international information exchange."
The Ministry stated: "In a context of economic and financial globalization, and with the proliferation of transactions involving goods and services between countries, it is essential to strengthen the exchange of information and administrative assistance between states and increase efforts in the fight against tax havens."
It added: "In this regard, efforts by tax authorities in both countries is important for increasing international pressure on tax havens through a network of agreements on the exchange of information in line with international efforts being made with the other OECD countries."
Spain, the UK, Germany, France, and Italy aim to ensure that the model agreed with the US is adopted multilaterally by a majority of countries in order to thus strengthen efforts against tax fraud and so-called "tax havens."
The ministers therefore sent a letter to the European Commissioner for Taxation, Algirdas Šemeta, announcing plans to work together on a pilot scheme for the multilateral exchange of tax information between the five countries, based on the FATCA model, having invited the other European Union member states to participate.
The launch of such an initiative is intended to enable Europe and the US to spearhead the promotion of a global system of automatic information exchange.