2011-10-24
Tax Information to be Exchanged between USA and Taiwan
The US Government newly requests all financial institutions to report the financial information of all US nationals to the US government in accordance with the US Foreign Account Tax Compliance Act (FATCA). Under the FATCA, the US tax authority may execute Foreign Financial Institutions Agreements (FFI) with financial institutions. Any financial institution which enters into an FFI with the US tax authority will be required to report to the US Government if any US national has deposits in Taiwan in an amount exceeding US$ 500,000.00.
If any financial institution has not executes an FFI with the US tax authority, such financial institution will have a penalty tax at the rate of 30% in all transactions related to “any income from US sources” imposed on it.
The Taiwan Bankers Association has communicated with the US government regarding this matter and has also raised questions with respect to difficulties that may be encountered when preparing such reports to the US Government, in addition to issues related to Taiwan’s personal data protection legislation. The US Government has thus agreed to further negotiations regarding this issue.
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