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Azerbaijan, U.S. Ratify Agreement on Foreign Account Tax Compliance Act

The Azerbaijani parliament ratified an agreement on Foreign Account Tax Compliance Act, FATCA between the governments of Azerbaijan and the U.S. at a plenary session Oct. 20.

The agreement signed September 9, 2015 defines the criteria. According to these criteria, the accounts of physical and legal entities can be inspected as part of the FATCA.

The Azerbaijani Ministry of Taxes and the U.S. Department of the Treasury are the authorized bodies monitoring the implementation of the agreement.

Azerbaijan has been a U.S. partner on FATCA since May 16, 2014.

Azerbaijan and the US Internal Revenue Service (IRS) agreed to sign an intergovernmental agreement on the implementation of FATCA by the country's banks. FATCA is the Foreign Account Tax Compliance Act.

The banks of all countries were to join the IRS system and inform about these accounts since July 1, 2014. Otherwise, they will be sanctioned in the form of a withholding tax of any passive income from the U.S. assets in the amount of 30 percent of their volume in favor of the bank. The revenues will be collected from the sale of securities, and even transit payments from 2017.

Today, all banks operating in Azerbaijan have joined the IRS system.

The participants of the securities market, subsidiaries of Azerbaijani banks in Georgia - "Caucasus Development Bank - Georgia", "International Bank of Azerbaijan - Georgia" and "PASHA Bank Georgia" also joined the IRS.

Moreover, the Azerbaijani national postal operator - Azerspost, the Baku office of the British auditing and consulting company "Baker Tilly", Baku Interbank Currency Exchange, the National Depository Center, Pasha Life, Qala Life and Ateshgah Life insurance companies joined the system.

Source: Trend

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