Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014

Administered by Department of the Treasury

Legislation au C2014A00067 In force Act

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Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014

 

No. 67, 2014

 

 

 

 

 

An Act to implement the FATCA Agreement, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—FATCA

Income Tax Assessment Act 1997

Taxation Administration Act 1953

 

 

 

Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014

No. 67, 2014

 

 

 

An Act to implement the FATCA Agreement, and for related purposes

[Assented to 30 June 2014]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014.

2  Commencement

  This Act commences on the day this Act receives the Royal Assent.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—FATCA

 

Income Tax Assessment Act 1997

1  Subsection 995‑1(1)

Insert:

FATCA Agreement has the meaning given by section 396‑15 in Schedule 1 to the Taxation Administration Act 1953.

Taxation Administration Act 1953

2  After Division 394 in Schedule 1

Insert:

Division 396—FATCA

Guide to Division 396

396‑1  What this Division is about

This Subdivision gives effect to the FATCA Agreement between the Government of Australia and the Government of the United States of America.

Reporting Australian Financial Institutions must give the Commissioner certain information about U.S. Reportable Accounts. For the 2015 and 2016 calendar years, they must also give the Commissioner information about payments made to Nonparticipating Financial Institutions.

This Subdivision also creates record‑keeping obligations in relation to the requirements to give the Commissioner information.

Table of sections

396‑5 Statements about U.S. Reportable Accounts

396‑10 Statements about payments to Nonparticipating Financial Institutions

396‑15 Meaning of the FATCA Agreement

396‑20 Permissions and elections

396‑25 Record keeping

396‑5  Statements about U.S. Reportable Accounts

 (1) Subsection (2) applies if:

 (a) an entity is a Reporting Australian Financial Institution (within the meaning of the *FATCA Agreement) at any time in a calendar year; and

 (b) the entity maintains a U.S. Reportable Account (within the meaning of the FATCA Agreement) at any time in the year.

 (2) The entity must give the Commissioner a statement that contains the information in respect of that U.S. Reportable Account that the Australian Government is required to obtain in order for it to fulfil its obligations under the *FATCA Agreement in respect of that U.S. Reportable Account.

 (3) The information contained in the statement must be determined by the entity by applying the due diligence procedures required under the *FATCA Agreement.

Note: Those due diligence procedures are specified in Annex I to the FATCA Agreement, subject to the application of Article 7 of that Agreement (consistency in the application of FATCA to partner jurisdictions).

 (4) A statement under subsection (2) must be in the *approved form.

 (5) More than one statement under subsection (2) may be included in the same document.

 (6) The statement must be given to the Commissioner no later than the first 31 July after the end of the year.

Note: Section 388‑55 allows the Commissioner to defer the time for giving an approved form.

396‑10  Statements about payments to Nonparticipating Financial Institutions

 (1) Subsection (2) applies if:

 (a) an entity is a Reporting Australian Financial Institution (within the meaning of the *FATCA Agreement) at any time in a calendar year; and

 (b) the calendar year is the 2015 or 2016 year; and

 (c) the entity makes a payment to a Nonparticipating Financial Institution (within the meaning of the FATCA Agreement) at any time in the year.

 (2) The entity must give the Commissioner a statement that contains the information in respect of that payment that the Australian Government is required to obtain in order for it to fulfil its obligations under the *FATCA Agreement in respect of that payment.

 (3) The information contained in the statement must be determined by the entity by applying the due diligence procedures required under the *FATCA Agreement.

Note: Those due diligence procedures are specified in Annex I to the FATCA Agreement, subject to the application of Article 7 of that Agreement (consistency in the application of FATCA to partner jurisdictions).

 (4) A statement under subsection (2) must be in the *approved form.

 (5) More than one statement under subsection (2) may be included in the same document.

 (6) The statement must be given to the Commissioner no later than the first 31 July after the end of the year.

Note: Section 388‑55 allows the Commissioner to defer the time for giving an approved form.

396‑15  Meaning of the FATCA Agreement

  The FATCA Agreement is the Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA, done at Canberra on 28 April 2014.

Note: The text of the Agreement is set out in Australian Treaty Series [2014] ATNIF 5. In 2014, the text of the Agreement in the Australian Treaty Series was accessible through the Australian Treaties Library on the AustLII website (www.austlii.edu.au).

396‑20  Permissions and elections

 (1) This section applies, for the purposes of this Division:

 (a) in determining whether the conditions in subsections 396‑5(1) and 396‑10(1) are satisfied; and

 (b) in determining which information the Australian Government is required to obtain in order for it to fulfil its obligations under the *FATCA Agreement.

 (2) To the extent that the *FATCA Agreement gives Australia the ability to permit an entity to use or rely on matters provided for in U.S. Treasury Regulations in determining obligations under the FATCA Agreement, assume that the permission has been given.

 (3) To the extent that the *FATCA Agreement gives Australia the ability to provide for an entity to make an election in determining obligations under the FATCA Agreement, assume that the entity may make the election.

396‑25  Record keeping

 (1) If an entity is obliged to give the Commissioner a statement under subsection 396‑5(2) or 396‑10(2), the entity must keep written records that:

 (a) correctly record the procedures by which the entity determines the information that is required to be contained in the statement; and

 (b) are in English, or readily accessible and easily convertible into English.

 (2) The entity must retain the records until the expiration of 5 years after the entity gives the Commissioner the statement under subsection 396‑5(2) or 396‑10(2).

Note: Section 288‑25 imposes an administrative penalty if an entity does not keep and retain records as required by this section.

3  Application

Application rules

(1) Subject to subitem (2), the amendments made by this Schedule apply in relation to a U.S. Reportable Account that is maintained by a Reporting Australian Financial Institution on or after 1 July 2014.

(2) The following provisions apply in relation to a payment that is made by a Reporting Australian Financial Institution on or after 1 July 2014:

 (a) section 396‑10 in Schedule 1 to the Taxation Administration Act 1953 (as inserted by this Schedule);

 (b) any other provision inserted in that Schedule by this Schedule, to the extent that the provision relates to the section mentioned in paragraph (a).

Permissions and elections

(3) For the purpose of subitems (1) and (2), subsections 396‑20(2) and (3) in Schedule 1 to the Taxation Administration Act 1953 (as inserted by this Schedule) apply in determining the meaning of a term used in those subitems.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 29 May 2014

Senate on 16 June 2014]

 

(122/14)

 

Overview

The Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014, enacted by the Parliament of Australia, was introduced to implement the Foreign Account Tax Compliance Act (FATCA) Agreement between Australia and the United States. The Act aims to ensure compliance with international tax regulations by requiring Australian financial institutions to report certain financial information about U.S. accounts and transactions to the Australian Taxation Office. The legislation facilitates the exchange of information necessary to meet Australia's obligations under the FATCA Agreement, thereby enhancing the transparency and accuracy of international tax reporting. The Act specifies the information that must be reported, the due diligence procedures to be followed, and the record-keeping requirements for financial institutions involved in these reporting obligations.

Scope and Application

The Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014 is an Act of the Commonwealth of Australia designed to implement the Foreign Account Tax Compliance Act (FATCA) Agreement between Australia and the United States. The Act applies to entities designated as Reporting Australian Financial Institutions under the FATCA Agreement, requiring them to provide the Commissioner of the Australian Taxation Office with specific information about U.S. Reportable Accounts and payments made to Nonparticipating Financial Institutions for the 2015 and 2016 calendar years. The entities must determine the required information by applying the due diligence procedures specified in Annex I to the FATCA Agreement and submit statements in an approved form by 31 July after the end of the year. Additionally, the Act imposes record-keeping obligations on these entities, requiring them to maintain written records in English or a readily accessible and easily convertible format for five years after the statement is submitted. The Act applies to accounts maintained and payments made by Reporting Australian Financial Institutions on or after 1 July 2014, and it may be extended or restricted through subordinate instruments as necessary.

Key Provisions

The Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014 (C2014A00067) is a piece of Australian legislation that serves to implement the FATCA Agreement between the Australian and United States governments. The main sections of the Act, particularly those found in Schedule 1 of the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953, detail the requirements and obligations for entities subject to the FATCA Agreement. Specifically, section 396-5 requires Reporting Australian Financial Institutions (RAFIs) to provide statements to the Commissioner of Taxation about U.S. Reportable Accounts they maintain. These statements must include specific information determined by applying the due diligence procedures outlined in Annex I of the FATCA Agreement. Similarly, section 396-10 mandates that RAFIs provide statements regarding payments made to Nonparticipating Financial Institutions for the 2015 and 2016 calendar years. These statements must also contain information determined by applying the same due diligence procedures. The statements must be in an approved form and submitted to the Commissioner by 31 July following the end of the year. The Act imposes several obligations on the entities it governs. Firstly, RAFIs must ensure that they maintain and provide accurate information about U.S. Reportable Accounts and payments to Nonparticipating Financial Institutions. This includes applying the due diligence procedures specified in the FATCA Agreement to determine the necessary information. Secondly, RAFIs are required to keep written records of the procedures used to determine the information for the statements. These records must be in English or easily convertible into English and retained for five years after the statement is provided to the Commissioner. Failure to comply with these record-keeping obligations can result in administrative penalties as outlined in section 288-25 of the Taxation Administration Act 1953. Breaches of the obligations set out in the Act can lead to civil and criminal consequences. For example, section 288-25 imposes an administrative penalty for entities that fail to keep and retain the required records. While the Act does not explicitly state the maximum penalty for such breaches, it is understood that penalties can be significant, given the nature of the obligations and the importance of international tax compliance. Furthermore, non-compliance with reporting requirements can potentially lead to criminal charges, depending on the severity and intent behind the breach. Such penalties underscore the seriousness with which the Australian government treats compliance with international tax agreements like FATCA.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.