Bermuda has become the latest country to sign an intergovernmental agreement to the US’ Foreign Account Tax Compliance Act, building on the 1988 bilateral tax information exchange agreement between the two countries.

Bermuda has become the latest country to sign an intergovernmental agreement to implement the US’ Foreign Account Tax Compliance Act, in a move that builds on the 1988 bilateral tax information exchange agreement between the two countries.

The Bermuda FATCA agreement - signed by US Consul General to Bermuda, Robert Settje, and Bermuda Minister of Finance, Bob Richards - calls for foreign financial institutions to identify and annually report key information about US account holders directly to the US Internal Revenue Service.

FFIs that do not provide the FATCA information will become subject to a 30 per cent withholding tax on certain US source payments, such as interest payments.

Bermuda has chosen the type of FATCA agreement that requires FFIs to report the specified information about US account holders directly to the Internal Revenue Service, rather than indirectly through the Bermuda authorities.

In related news, at the end of November, the Government of Bermuda signed a bilateral tax information exchange agreement with the Republic of Poland. That deal - inked at the Polish Embassy in London - has created a formal avenue for an exchange of tax-related information between the two countries on a “by request” basis.