Belgium To Strike FATCA Deal With US
Belgium and the US will sign an intergovernmental agreement (IGA) in Brussels on April 23 for the implementation of the US Foreign Account Tax Compliance Act (FATCA), the Belgian Finance Ministry has announced.
The IGA requires the Belgian Tax Administration and the US Internal Revenue Service (IRS) to exchange information automatically on accounts held by US taxpayers in foreign financial institutions in Belgium, and vice versa.
The Finance Ministry said that the signing of the treaty will allow Belgian banks sufficient time to conform with the requirements of the IGA, which will involve following the electronic procedure defined by the IRS. Failure of an FFI to submit information could result in a 30 percent withholding tax being levied on US source payments, and may result in the potential loss of correspondent banking relationships.
Belgian Finance Minister Koen Geens welcomed the conclusion of the technical negotiations, and said that the IGA will lead to the improved enforcement of international tax obligations and will prevent the imposition of a withholding tax.
The IGA between Belgium and the US is due to apply from September 2015.