Nordic banks push for Fatca deal
The push for reciprocity under the US Foreign Account Tax Compliance Act (Fatca) is gaining pace, with banks in four Nordic countries now also urging their national governments to facilitate bilateral agreements with the US.
The reciprocity agreements will allow foreign financial institutions to report US customer data to their national governments, rather than directly to the US Interval Revenue Service (IRS). When the draft Fatca regulations were released in February this year, the UK, Spain, Italy, France and Germany issued a statement of intent alongside the US detailing the intention of reciprocal agreements.
Banking associations in each of the Nordic countries have contacted their governments to request action be taken. The Swedish Bankers’ Association has stressed the urgency of the situation in a letter to the Swedish finance ministry.
“A rapid response from the Swedish side is required, as there is no indication the US will slow down its process, despite massive criticism of Fatca worldwide,” the letter says. It goes on to ask that the Swedish government “actively commit to making the necessary changes urgently in existing tax treaties with the US on reporting on a reciprocal basis”.
The Danish Banking Association has a taken a different angle with its approach to its government. “The Swedish letter focuses on their double-taxation treaty [with the US]; this is not the approach we decided on in Denmark,” says Mick Thimm Sayed, manager at the department of economic policy and banking at the Danish Bankers’ Association in Copenhagen. “We, in general terms, asked our ministry of taxation to get involved and contact the US authorities in order for Denmark to be part of this group of countries with inter-governmental agreements. We didn’t ask for a change in double-taxation treaties because from our perspective that’s not the way it would work.”
And the Norwegian and Finnish banking associations have also been in discussions with their own governments about entering into an inter-governmental agreement with the IRS under Fatca. “We are fully in line with our Swedish, Danish and Finnish colleagues,” says Jan Digranes, manager of banking and capital markets at Finance Norway. “And we are just as worried [about Fatca] as they are.”
And the Federation of Finnish Financial Services, which represents insurance companies, asset managers and the wider financial community in Finland alongside its banks, has also confirmed it had discussions about a month ago with its finance ministry.