A Memorandum of Understanding was signed at the same time that outlines the expected legislative process. It is expected that the Australian Parliament’s approval for the IGA will be sought this year and legislation passed by 30 September 2015 to bring the IGA into force.
The IGA contains an unexpected and welcome concession in the definition of ‘Financial Institution with a local client base’ which we can expect to see in the New Zealand IGA. This concession can now be applied by financial institutions whose financial accounts are at least 98% held by Australian or New Zealand residents rather than just New Zealand residents as was the position previously indicated.
This will expand the number of entities that can utilise this particular concession and should make FATCA compliance for those qualifying trans-Tasman groups that little bit easier.