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US, Singapore reach agreement on tax evasion

Published on May 6, 2014 7:18 AM
 
Singapore has reached a tax information-sharing agreement with the United States under a new law meant to combat offshore tax dodging by Americans, a US Treasury Department spokesman said on Monday. -- ST FILE PHOTO: DESMOND WEE

WASHINGTON (REUTERS) - Singapore has reached a tax information-sharing agreement with the United States under a new law meant to combat offshore tax dodging by Americans, a US Treasury Department spokesman said on Monday.

Set to take effect on July 1, the Foreign Account Tax Compliance Act of 2010 (FATCA) will require foreign banks, investment funds and insurers to hand over information about Americans' accounts that have more than US$50,000 (S$62,500) to the US Internal Revenue Service.

Foreign firms that do not comply face a 30 per cent withholding tax on their US investment income and could effectively be frozen out of US capital markets.

The Singapore deal, known as an intergovernmental agreement, was expected for more than a year and is significant because it broadens FATCA's dragnet to a major Asian financial centre, sources have said.

 
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