MINNEAPOLIS, July 8, 2014 /PRNewswire/ -- On June 9, South Africa formally signed a Model 1 intergovernmental agreement (IGA) in order to comply with the Foreign Account Tax Compliance Act (FATCA). South Africa has also begun utilizing FATCA to tighten their local tax regulations.
The South African IGA is reciprocal, allowing for the automatic exchange of information between the U.S. and South Africa. The established automatic exchange of information also provided an opportunity for domestic information transparency. The South African Revenue Service (SARS) announced a proposed business requirement specification (BRS) which would facilitate the automatic reporting of information by financial institutions to the SARS. SARS will be able to utilize this same information for domestic tax purposes. Therefore, the proposed BRS for FATCA compliance will also lay the groundwork to fulfill obligations for other information exchange treaties, such as the Organization for Economic Cooperation and Development's (OECD) common reporting standard (CRS) and domestic tax collection.
"South Africa is not alone in employing FATCA to tighten local tax legislation and enforce tax compliance," Convey Compliance's Vice President of Product Strategy Jeff Cronin stated. "Israel's Ministry of Finance is pushing for additional penalties for noncompliance with FATCA. It is likely that more governments will follow suit, employing FATCA as a means to address local tax issues. CRS will be an additional motivator for governments to clamp down on local tax compliance and increase tax regulations in an effort to expand financial transparency across the globe."
For nearly 30 years, Convey has been at the forefront of the industry in providing third-party tax information reporting technology and services to over 2,200 clients. Convey's flexible, scalable software and the guidance and focused experience of our compliance experts, have helped small companies and almost half of the Fortune 500 -- rest assured that they're complying with regulatory obligations and reporting efficiently and correctly, no matter the requirement or jurisdiction. Convey helps organizations centralize processes, reduce risk, improve operational efficiency and ensure client satisfaction by providing the clearest path to compliance. Learn more about Convey at: www.convey.com.
SOURCE Convey Compliance