The Dutch Ministry of Finance on 1 July 2014 opened an internet consultation on the FATCA implementation decree. The consultation provides Dutch financial institutions an opportunity to gain insight in the way the FATCA treaty is likely to be implemented in Dutch law and regulation and to provide any comment on the envisaged implementation.
Following the introduction of the FATCA legislation in the US, the Netherlands and the US signed a FATCA treaty (Model 1A) in December 2013 which sets out the principal agreements between the US and the Netherlands on the implementation of FATCA in Dutch law and regulations. The Bill ratifying the FATCA treaty will be send to Dutch parliament shortly. In the FATCA treaty it is, among other things, agreed that Dutch financial institution will provide information on bank accounts of US nationals and residents to the Dutch tax authorities. The Dutch tax authorities will subsequently forward the information to the IRS. As a result, Dutch financial institutions will not be obliged to conclude individual agreements with the IRS and will in principle not be required to withhold any US withholding tax. The first information exchange under the FATCA treaty is due to take place in September 2015.
The legal basis which allows the Dutch financial institution to provide the relevant information to the Dutch tax authorities is included in the Dutch Act on International Support with the levy of Taxes (Wet op de internationale bijstandsverlening bij de heffing van belastingen). The obligations following from the FATCA will be included in the implementation decree relating to the Act. It is this implementation decree that is now open for consultation. Input and comments can be submitted to the Dutch Ministry up until and including 26 August 2014 (www.internetconsultatie.nl/fatca). Responses will only be published upon prior approval of the respondent.
This article first appeared in Tax Notes International