The government of Guernsey has signaled its desire to negotiate a Foreign Account Tax Compliance (FATCA) agreement with US tax authorities, much to the delight to the island's finance industry.
The news came as peer offshore domiciles Jersey and the Isle of Man revealed their own intentions to sign FATCA agreements. Over the summer US authorities unveiled a model intergovernmental agreement to help facilitate negotiations.
In a response statement Guernsey Finance head Fiona Le Poidevin cheered the move, saying the agreement would look similar to a “Model I” type agreement its mainland neighbour the UK signed last month.
The Model I agreement is a “reciprocal” arrangement that creates an automatic information exchange based on existing bilateral tax treaties and agreements.
In an interview Le Poidevin was unable to offer specifics on how negotiations were proceeding, saying that “in terms of the way in which the intergovernmental agreement between Guernsey and the US will work in practice, then I’m afraid all we can say is that it will work along similar lines to the UK and US agreement. Obviously, precise details still to be concluded.”
A Guernsey government statement detailed that discussions have taken place at official level between the Crown Dependencies (Jersey, Guernsey and the Isle of Man) jointly and the US.
Formal negotiations will now take place with the intention of concluding intergovernmental agreements rapidly, according to the statement.
Le Poidevin understands the planned timetable for formally concluding an agreement is over the course of the next few weeks and most likely before the end of the year.
Once signed the agreement will be subject to ratification by the island's parliament.