The New Zealand government has signed an inter-governmental agreement (IGA) with the United Sates to streamline financial institutions’ compliance with the Foreign Account Tax Compliance Act. The much-anticipated agreement was signed on June 12, just two weeks before FATCA’s July 1 commencement date. Under the agreement, the New Zealand government has agreed to implement the rules to require and enable local financial institutions to comply with their FATCA obligations, while in exchange, the U.S. government will treat all New Zealand financial institutions as deemed compliant.
Following the announcement of the IGA, New Zealand’s parliament passed the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill on June 19, which provides New Zealand financial institutions with the legal framework to comply with the FATCA IGA. Royal assent is thought to be imminent, to allow the bill to come into force before FATCA’s July 1 start date.
