Global

Details

  • Service: Tax, International Executive Services, International Tax
  • Type: Regulatory update
  • Date: 10/23/2013

South Africa - Prepare for FATCA compliance 

October 23:  Officials with the South African Revenue Service (SARS) have indicated a commitment to enter into a FATCA* Model 1 Intergovernmental Agreement (IGA) with the United States.

*Foreign Account Tax Compliance Act (FATCA)


Accordingly, FATCA would be a reality for South African financial institutions, and these entities would need to consider the effects of an IGA and take steps toward FATCA compliance.

South Africa IGA

  • Compliance with FATCA would become a statutory obligation under South African law.
  • There would be client identification and reporting requirements of a variety of South African financial institutions.
  • There would be a significant impact on the South African financial services industry as a whole—including insurers that meet the definition of “specified insurance companies.”

KPMG observation

With the deadline for FATCA compliance fast approaching, financial institutions must start considering their IGA obligations, and take the necessary steps to comply with these. It is expected that promulgation of the FATCA laws in South Africa will take the form of regulations and these will render compliance with the IGA obligations mandatory for all South African financial institutions.


South African financial institutions need to consider beginning the compliance process as soon as possible, as the deadlines are fast approaching (with the first effective date being 1 July 2014, by which time all financial institutions must commence on-boarding customers in accordance with the South African IGA procedures).


Read an October 2013 blog posting by the KPMG member firm in South Africa: FATCA, a reality for South African financial institutions




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