Reserve Bank of India (RBI) has announced that Government of India India and US have reached an agreement in substance on the terms of an Inter-Governmental Agreement (IGA) to implement US-FATCA and India is now treated as having an IGA in effect from April 11, 2014. However, IGA would be signed only after the approval of Cabinet.

Indian Financial Institutions would have time upto December 31, 2014 to register with US authorities and obtain a Global Intermediary Identification Number (GIIN).

FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts. FATCA focuses on reporting by U.S. taxpayers about certain foreign financial accounts and offshore assets, as well as by foreign financial institutions (FFIs) about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.  

Unless exempt, FFIs that do not both register and agree to report face a 30% withholding tax on certain U.S.-source payments made to them. Under FATCA, to avoid being withheld upon, foreign financial institutions (FFIs) may register with the IRS and agree to report to the IRS certain information about their U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners. FFIs that enter into an agreement with the IRS to report on their account holders may be required to withhold 30% on certain payments to foreign payees if such payees do not comply with FATCA.

http://rbidocs.rbi.org.in/rdocs/notification/PDFs/FA27062014CA.pdf

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8970&Mode=0

 

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About Bhatiaco

About Us Bhatia & Co, Inc, Certified Public Accountants is a diversified Full service financial and business services firm concentrating on providingservices to domestic and international organizations, with special focus on international transactions and tax planning. Our Team of highly skilled and diversified range of finance and business professionals provide services in areas of business and individual tax,audit & review, international tax planning, incorporation and corporatecompliance, accounting, outsourcing, business consulting, financial and retirement planning, immigration consulting and litigation support to adiverse range of clients.. We are located in the prestigious Techmart building in the heart of Silicon Valley in Santa Clara,CA for the last 13+ years and have offices in New Delhi for 30+ years. . Our current engagements include cross border tax planning and transactions, corporate structuring, and complex Tax audits and representation including recent oversees disclosure programs (OVDP/OVDI). Our organization is headed by Neeraj Bhatia, who is an accomplished accounting professional with 30+ years expertise in international and domestic tax planning and compliance for startups and multinational entities. Neeraj is a licensed CPA in California, New York and Colorado and a CA in India. He also has a LL.M. in International Taxation from the US, Costs and Works (Management) Accountancy, and a Bachelor (Honors) degree in Commerce from India. During his academic years he has received several awards and scholarships for being the top ranker nationally.

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