Singapore is close to signing a Foreign Account Tax Compliance Act (FATCA) inter-governmental agreement (IGA) with the US.

The update came after Singapore deputy prime minister and minister for finance Tharman Shanmugaratnam held meeting with US Treasurey secretary Jacob Lew.

FATCA, which was laid by Congress in 2010, aims to make sure that the US obtains complete information on accounts held abroad at foreign financial institutions (FFIs) by the US persons.

Failure by an FFI to reveal information on their US clients, the US financial institutions will withhold 30% tax on US-source income.

The US Treasury has also developed a new model, IGAs, to address circumstances where foreign law would prevent an FFI from adhering with the FFI terms.

Tax-News quoted Shanmugaratnam saying that the signing of the FATCA IGA between the US and Singapore will underscore Singapore’s preparedness to engage in automatic exchange of information as long as it is undertaken on a level playing field basis with regard to all financial centres and is undertaken with countries that respect the rule of law with regard to confidentiality of information.