FATCA becomes fact

GoG updates on FATCA progress – the plot thickens!

fatca USAWhat was initially a US-only tax disclosure initiative, driven by their Foreign Account Tax Compliance Act due to become effective in 2014, has become the vogueish acronym for a series of similar agreements between other territories – perhaps seen as the successor to Tax Information Exchange Agreements (TIEAS).

The Gibraltar Government has issued an update on issues surrounding FATCA. Whilst US FATCA is still the primary driver, it seems a FATCA with the UK is gaining prominence and likely to be concluded before the US agreement. Of course, industry would like to see conclusion of FATCA with the UK linked to resolution of a number of issues long-outstanding affecting Gibraltar’s finance industry, some of which are insurance-related (e.g. Part VII transfers). Government have this to say:



Whilst it was originally envisaged that the Intergovernmental Agreement (IGA – the umbrella agreement to provide for the delivery of information exchange under FATCA) with the USA would be signed first, recent developments (such as the US shutdown etc.) have meant that the UK IGA is very likely to be concluded prior to that of the USA.

You will have seen that the Crown Dependencies of Jersey, Guernsey and the Isle of Man (CDs) have all now signed the IGA with the UK; being a reciprocal version i.e. they receive information as well as give it.

The Gibraltar IGA with the UK is also reciprocal.

FATCA uk-fatcaNone of the Overseas Territories (OTs) have yet signed but are close, as we are. The rest of the OTs’ IGAs are (we understand) not reciprocal (they generally don’t have a interest in receiving tax information) but are otherwise the same as ours and the CDs.

There are still a few administrative details in ours that are left to decide such as; a final decision has to be taken about who our Competent Authority is going to be.

At this link can be found the HMRC website where the IGAs signed with the Crown Dependencies have been published (Jersey, Guernsey and the Isle of Man). This website also has links to the UK regulations and guidance for US FATCA and a skeleton draft of the future guidance for reporting to the CDs and Gibraltar.

At this link is also attached a copy of a very-near-final draft IGA between the UK and Gibraltar; as you will see this is drafted with exactly the same terms as those with the CDs.

You will note that the document has a section dealing with UK resident non-doms.

The UK and USA are developing a “schema” for electronic reporting of data i.e. which bit of information goes where on a form. This is not yet quite finalised. When it is, we shall arrange for it to be circulated.

The Gibraltar Government is not intending to issue guidance so as to leave industry to take advice. Some in industry are taking this advice on an association basis so as to reduce costs.

As regards timelines for UK FATCA, therefore, the following is on course:

  • Signing the IGA with the UK during the month of November 2013.
  • Amending the TIEA with the UK to provide for FATCA style automatic exchange also during the month of November.
  • Introducing domestic legislation for the enforcement of IGAs c. January 2014.

UK FATCA due diligence key dates are July 2014 for new business, December 2014 for all existing business and exchange to take place September 2016.

A couple of Gibraltar associations have raised very specific technical queries with us and these are being dealt with bi-laterally.

For the avoidance of doubt, the Global intention is that all forms of FATCA (whether US, UK or the G 5 pilot programme and the future Global FATCA being pushed for by the OECD) should be as similar as possible so as to avoid any extra administrative burdens. One notable exception is e.g. that for US purposes, their citizens as well as other tax residents of the USA are caught by virtue of the fact that they have a worldwide system of taxation on their citizens.

B) FATCA with the USA

Our IGA with the USA will be essentially the same as those that will be signed with the CDs and OTs.

None of the CDs and OTs have yet signed with the USA.

The USA is in the process of trying to sign IGAs with as many countries as possible by the end of June 2014.

We (and the CDs and OTs) are likely to sign an IGA with the USA before Christmas or just after (i.e. sometime in December or early in the New Year).

We shall during the same period be amending our TIEA with the USA to allow for FATCA automatic exchange.

The domestic legislation to be introduced for all IGAs domestically in Gibraltar will apply to the US IGA.

The key dates for due diligence for US FATCA remain as July and December 2014 with exchange taking place in September 2015 (one year earlier than with the UK).

The IGA with the USA is also to be reciprocal although the US needs (in due course) to pass legislation to enforce this in their country to cover more than just individual persons with bank accounts.

We are awaiting a copy of the very-near-final draft IGA with the USA. It is being tweaked as a final model to be used generally by them. These tweaks are not material changes and it will not be substantially different to the version that some(e.g. FATCA working group and heads of associations) have seen before.

For the avoidance of doubt, Government does not believe that the USA will delay FATCA any further.

FATCA keep-calm-and-fatca-257x300C) G 5 FATCA – Spain, Italy, France, Germany, UK and the CDs and OTs

This is now beginning to have real momentum.

A large number of other countries have also signed up to this pilot programme.

The G 5 are pushing to establish a timeframe which is as follows:

  • January 2014 – the OECD’s Committee of Fiscal Affairs signs off the Common Reporting Standard
  • End of 2014 – implement the standard in domestic law and conclude Competent Authority Agreements
  • July 2015 – Financial institutions begin operating the due diligence procedures
  • September 2016 – tax administrations exchange information with respect to the second half of 2015

D) OECD Global Forum on Exchange of Information and Transparency – Jakarta, November 2013

It is clear that, whilst up until now the OECD Global Forum has concentrated on the signing of TIEAs and Multilateral TIEA mechanisms, the emphasis as to a new Global standard is now shifting to focus on automatic exchange of information to “FATCA” style standards. A global FATCA if you will. We shall keep you informed of the outcomes from the next Global Forum.


GIA, with the kind assistance of EY Limited, are going to hold a short seminar for members early in the new year to discuss how FATCA will affect insurance companies, managers and intermediaries in Gibraltar, and what they should do in terms of registration and reporting. Numbers may be limited, so if you would like to get your name down early, please contact Neil Rumford (click for e-mail), Tax Committee Chairman.

For a refresher on FATCA generally, have a look at this article written for us by Neil and published previously on this website.

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