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Australia: Foreign Account Tax Compliance Act - The omnibus edition

Tuesday, 25 March 2014   (0 Comments)
Posted by: Authors: A. Mortel and H. Badger
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Authors: A. Mortel and H. Badger (Moore Stephens)

Non-US financial institutions including banks, investment funds and trusts that have US sourced income and investments need to prepare to ensure they are ready when new withholding taxes (at 30% of US source income or gross proceeds) are phased in on 1 July 2014. This document outlines the requirements of the Foreign Account Tax Compliance Act (FATCA) and the timetable that must be maintained in order to ensure there is no withholding from income / proceeds after 30 June 2014.


The Hiring Incentives to Restore Employment Act of 2010 (HIRE Act) introduced a general requirement on US withholding agents to withhold tax on certain payments to foreign financial institutions (FFIs) that do not agree to report certain information to the Internal Revenue Service (IRS) regarding US accounts, and on certain payments to non-financial foreign entities (NFFEs) that do not provide information on their substantial US owners. Withholdable payments include US source income on securities and any gross proceeds from the sale of securities which generate US source income.

Click here to read our document FATCA - The Omnibus Edition

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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