An Inter-Governmental Agreement has been signed between Mauritius and the United States for the implementation of the Foreign Account Tax Compliance Act (FATCA), as well as a bilateral tax information exchange agreement (TIEA).
The signing ceremony for the two agreements was held on December 27, 2013, in Port Louis and the signatories were the Mauritian Vice-Prime Minister, Minister of Finance and Economic Development. Xavier-Luc Duval and the US Ambassador to Mauritius, Shari Villarosa.
FATCA, enacted by Congress in 2010 and taking effect on July 1, 2014, is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients, including account ownership, balances and amounts moving in and out of the accounts, will result in a requirement to withhold 30 % tax on payments of US-sourced income.
To address situations where foreign law would prevent an FFI from complying with the terms of an FFI agreement, Treasury has developed model IGAs.
Under the terms of the Model 1 IGA between Mauritius and the US, Mauritian FFIs will be required to report their information to the Mauritius Revenue Authority, which will then automatically exchange the information with the US, according to the TIEA.
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