Guernsey, Jersey and Isle of Man sign US tax deal

Guernsey, Jersey and Isle of Man have signed an agreement to share more tax information with the United States of America.

It follows the introduction of the Foreign Account Tax Compliance Act (FATCA) in the US aimed at clamping down on tax evasion.

All three islands signed a similar deal with the UK in October.

The islands expect to begin the automatic reciprocal exchange of tax information from 2015.

The US government introduced FATCA in a bid to recover an estimated $100bn (£60bn) a year in unpaid taxes on funds held in overseas accounts.

The law, which will apply from 1 July, means all financial institutions around the world have to report the assets and incomes of any US citizens with $50,000 (£30,000) on their books directly to the US Internal Revenue Service.

Companies that do not comply could have 30% of any dividends and interest payments withheld.

In a joint statement, the chief ministers of all three islands said the agreement showed their commitment to tax transparency and would enhance their international relationships.

They said that as the FATCA model was being developed as the global standard by the OECD, it showed the islands were at the forefront of fighting tax evasion.

The islands are working together to publish guidance for businesses for both the US FATCA agreement and the similar deal signed with the UK.

This guidance is due to be released for consultation early next year.

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