John Brogden, a former politician and chief executive of the Financial Services Council – a trade body representing Australia’s retail and wholesale fund management businesses, superannuation funds, life insurers and financial advisory networks, made the comments to Australian magazine Global Custodian.
Speaking on his return from Washington DC, where he briefed regulators and elected officials about how FATCA would impact the superannuation industry in Australia, Brogden reportedly said: “There are two significant take-outs [from meetings].
“The first is that I am highly confident that the U.S. government will move to exempt Australian superannuation funds. There’s always been a clear intent by U.S. Treasury to exempt genuine pension funds, and Australian superannuation funds have always been regarded as genuine pension funds. I am more confident than ever.
“The only remaining concern is ensuring the definition that is achieved for the exemption will suit the Australian superannuation industry. The reason I say this is that the Treasury is looking for an exemption that will suit the worldwide pension industry, and they have to write an encompassing definition that takes out the loopholes.”
FATCA, which is aimed at cracking down on American tax cheats, is due to take effect in January 2013 and will have a huge impact on financial institutions around the world which have US clients on their books.
Institutions will have to provide the American tax authority, the Inland Revenue Service, with information about any US clients they have on their books or face a 30% withholding tax on all earnings from US sources.
Yesterday, International Adviser reported that concerned institutions are on “high alert” after the US Treasury Department reiterated its intention to unveil a key set of details as to how financial institutions are to comply with the legislation before the end of this month.
Click here for a detailed run-down of who may be affected form Royal London 360°’s Neil Chadwick.
