RBI says India to implement US foreign tax compliance act

Tags: News
The RBI has said India and the US have agreed to implement a foreign tax compliance law and asked banks and financial institutions to register by this year-end to report accounts and assets held by US citizens.

India and the US have agreed to implement the Foreign Accounts Tax Compliance Act (FATCA), a US law that targets tax non-compliance by US taxpayers with foreign accounts. The Inter-Governmental Agreement (IGA) on FATCA, which came into effect on April 11, will be signed only after Cabinet approval.

"Indian Financial Institutions would have time up to December 31, 2014, to register with US authorities and obtain a Global Intermediary Identification Number (GIIN)," the RBI said in a notification.

FATCA mandates reporting by US taxpayers about certain financial accounts and offshore assets and reporting by foreign financial institutions about accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest.

Indian financial institutions with overseas branches have time until December 31 to register. However, they should register for GIIN only when the formal IGA is signed after cabinet approval, the RBI added, saying this would be communicated to them.

Financial entities with overseas branches in a jurisdiction that does not have IGA but allows them to register as foreign financial institutions (FFI) should do so with the US authorities before July 1, 2014, to avoid potential withholding under FATCA.

Overseas branches in a jurisdiction that does not have IGA and does not allow an FFI agreement may not register and they would eventually be subject to withholding under FATCA, it said.

The RBI said if registration of the parent bank or head office is a pre-requisite for a branch to register, such banks should do so as per the given time frame.


  • India moving just one rank on ease of doing business is an eye opener

    Narendra Modi government’s disappointment on 130th ranking assigned to India on ‘ease of doing business’ by the International Finance Corporatio


Stay informed on our latest news!


BK Chaturvedi

Why is India doing badly on hunger?

Health of its young is a vital policy issue for ...

Rajgopal Nidamboor

Perceiving is more than what meets the eye

Philosopher Aristotle emphasised the fact that “thinking always involves thinking ...

Shona Adhikari

Owais Husain searches for a lost homeland

The seventh edition of the Mumbai Public Art Festival (PAF) ...