Implementation of the Multilateral Competent Authority Agreement (MCAA) and Foreign Account Tax Compliance Act (FATCA).
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
1st Floor,ICADR Bulding,Plot No.6,
Vasant Kunj Institutional Area,
Phase – II, New Delhi-110070
All Intermediaries registered/appointed by PFRDA
Dear Sir/ Madam,
Sub: Implementation of the Multilateral Competent Authority Agreement (MCAA) and Foreign Account Tax Compliance Act (FATCA).
1. It is brought to the attention of all the intermediaries that India has joined the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Financial Account Information on June 3, 2015. In terms of the MCAA, all countries which are a signatory to the MCAA, are obliged to exchange a wide range of financial information after collecting the same from financial institutions in their country/jurisdiction.
2. Further, on July 9, 2015, the Governments of India and United States of America (USA) have signed an agreement to improve International tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA) in India. The USA has enacted FATCA in 2010 to obtain information on accounts held by U.S. taxpayers in other countries. As per the aforesaid agreement, foreign financial institutions (FF1s) in India will be required to report tax information about U.S. account holders/ taxpayers directly to the Indian Government which will, in turn, relay that information to the U.S. Internal Revenue Service (IRS).
3.For implementation of the MCAA and agreement with USA, the Government of India has made necessary legislative changes to Section 285BA of the Income-tax Act, 1961. Further, the Government of India has notified Rules 114F to 114H (herein after referred as “the Rules”) under the Income Tax Rules, 1962 and form No. 61B for furnishing of statement of reportable account as specified in the Rules. The Rule is available at http://www.incometaxindia.gov.in/communications/notification/notification%20no.%2062 % 20dated %2007-08-2015.pdf
4. All intermediaries registered/appointed by PFRDA are advised to take necessary steps to ensure compliance with the requirements specified in the aforesaid Rules after carrying out necessary due diligence.
Sumeet Kaur Kapoor