Guernsey has signed an intergovernmental agreement with the US government in relation to the Foreign Account Tax Compliance Act (FACTA).
It was signed by Guernsey’s chief minister, Peter Harwood, at the US Embassy in London.
Harwood said: “Guernsey has been committed to exchanging tax information since it signed its first Tax Information Exchange Agreement with the US authorities in 2002.”
“Today, we have enhanced those arrangements, and in doing so we have further enhanced our reputation and our leadership position on tax transparency. This is an important agreement for our finance sector. It gives them the long-term sustainability and stability that they have asked for clearly and consistently.”
Jersey and the Isle of Man also signed similar agreements with the US government at the same time as Guernsey.
Fiona Le Poidevin, chief executive of Guernsey Finance, said: “I am very pleased that Guernsey has signed this FATCA agreement with the US. It builds on the TIEA we have had with the US since 2002, our adoption of automatic exchange of information under measures equivalent to the EU Savings Tax Directive in 2011 and the package of tax measures we signed with the UK Government in October.”
Michael Betley, executive group chairman of Trust Corporation, believes that Guernsey’s FATCA agreement will bring certainty to the financial services industry.
Betley, whose business has a number of US clients, said the FATCA initiative had been “enormously distracting and costly for industry” and was a further unwelcome burden of doing international business.
Betley said that the cooperative approach between the crown dependencies will pay dividends and avoid future uncertainty where there are pan-island client relationships.
“It is a relief that we have finally signed the US inter-governmental agreement, after many months of waiting. It has been a hard slog but at least we can now plan with a greater degree of certainty.”
“The islands have been working hard together to produce some common guidance on the interpretation and management of both the UK and US FATCA process and it is hoped that these guidance notes, which are being finalised, will be released very shortly for wider consultation,” he said.
The FATCA agreement was concluded 48 hours after Guernsey's parliament gave its unanimous approval and committed the island to continuing to meet the highest standards of tax transparency.
