The Association of International Life Offices (AILO) has written a letter to the US Treasury Department making representations in relation to the Foreign Account Tax Compliance Act (FATCA), following the most recent set of draft regulations published on 8th February 2012.
Whilst some of the proposals in the draft regulations are welcomed by AILO, such as the intention to exclude low risk products such as retirement plans and the raising of thresholds for undertaking searches on individual life insurance business, AILO believes that further improvements could be incorporated into the final regulations to improve the likelihood of FATCA succeeding. In its letter, dated 30 April 2012, AILO explains its reasoning for seeking these improvements, giving details of the activities of its Members in various EEA jurisdictions that would make the current draft regulations difficult to comply with.
With the intention of assisting the US Treasury’s process, AILO has suggested how some of the clauses in the draft regulations could be amended, in areas such as retirement plans, annuities and trusts.
Brendan Harper, Chair of AILO’s Taxation Committee, says: “The intention of the US Treasury is to ensure improved tax compliance in respect of foreign financial assets and AILO is of course supportive of this in principle. However, the diverse regimes governing the EEA and other jurisdictions in which policyholders maintain their investments mean that a comprehensive set of regulations will be needed to cater for all circumstances. We hope that the US Treasury Department will accept AILO’s representations and take them into account in formulating the final regulations to ensure FATCA’s success.”
AILO, which will celebrate its 25th anniversary later this year, exists to support the international life industry and today represents the interests of over 50 EU/EEA and other life insurance companies. Headquartered in Luxembourg, AILO’s members are based in over 10 locations worldwide and transact cross border business in the EEA and elsewhere. AILO is a unique trade body representing only life assurers operating internationally.
