The Government of the Republic of Mauritius and the Government of the United States of America (US) signed a Tax Information Exchange Agreement (TIEA) and an Inter-governmental Agreement (IGA), for the implementation of the Foreign Account Tax Compliance Act (FATCA) between the two countries on 27 December 2013 in Port Louis, Mauritius.
The objective of the FATCA, enacted in March 2010 by the US authorities, is to identify US persons behind foreign financial holdings and communicate their corresponding investment information, namely their names, addresses, account numbers, account balances and incomes derived from such investments to the US Inland Revenue Service (IRS).
The FATCA provides that unless a foreign financial institution (FFI) has an FFI agreement with the US IRS or is located in a jurisdiction that has an IGA with the US, a 30 percent withholding tax will be applied to payments of certain US-sourced income such as interests, dividends and insurance premiums made to the FFI.
Under the IGA, the Competent Authorities of Mauritius and the US shall obtain information required on all reportable accounts and shall annually exchange this information on an automatic basis. Individual FFIs will not have to register directly with the US IRS.
The Financial Services Commission will provide further information to its licensees once the Ministry of Finance and Economic Development finalises the Regulations for the implementation of the IGA and TIEA.
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