Baku, Azerbaijan, June 19
By Emin Aliyev - Trend:
Azerbaijani parliament will on June 20 discuss amendments to some legislative acts designed to align national legislation with the agreement to the U.S. on the Foreign Account Tax Compliance Act (FATCA).
Azerbaijani MPs will consider adding article 76.2-1 to the Tax Code. The article reads as follows:
"Under Azerbaijan's international agreements with other states, the information on financial operations carried out by individuals and legal entities of these states in Azerbaijan, is transferred directly or indirectly to the authorized body of those states in the volume and manner defined by the relevant body of the executive authority."
Parliament will also mull the inclusion of similar articles to the 'Law on insurance activity' (article 6 'Insurance privacy'), 'Law on Personal Data' (article 13 'Transfer of Personal Data'), and the 'Law on Banks' (article 41, 'Bank secrecy').
Additionally, it is planned to include article 60.1.4 into the Tax Code. This article envisages financial sanctions for violation of article 76.2-1 - i.e. a fine of 30 percent on transactions on such accounts, or 400 AZN for each such account even if there has not been any activity.
Earlier, Azerbaijan and the U.S. Internal Revenue Service (IRS) agreed to conclude an intergovernmental agreement on implementation of the Foreign Account Tax Compliance Act (FATCA) by Azerbaijani banks.
Starting from July 1, 2014 the banks in all countries should join the system of the IRS.
FATCA imposes a 30 percent withholding tax on payments of U.S. source income made to non-U.S. financial institutions unless they enter into an agreement with the U.S. Internal Revenue Service and disclose information about their U.S. account holders.
A similar collection is planned to be deducted from revenues of the sale of securities and even transit payments starting from 2017.
The following banks have been registered with the IRS: International Bank of Azerbaijan (IBA), Bank Technique, Zaminbank, Bank Avrasiya, Azer Turk Bank, Muganbank, Caucasian Development Bank, Kapital Bank, Pasha Bank, Gunay Bank, DemirBank, Xalq Bank, Turan Bank, Nikoil Bank and AtaBank.
The Baku office of Baker Tilly (British auditing and consulting company), as well as, the IBA and Pasha Bank subsidiaries in Georgia - International Bank of Azerbaijan-Georgia and Pasha Bank Georgia were also registered with the IRS.
Azerbaijan was included on the IRS list of cooperating countries on May 16, and the deadline for Azerbaijani financial institutions' registration in the U.S. tax authority's system was extended until December 31, 2014.
The finalization of the Azerbaijani-U.S. intergovernmental agreement, completion of all necessary domestic procedures and signing of the agreement will take place before late 2014.
An additional document regulating the practical organization of information exchange, ensuring privacy and covering other issues is also expected to be signed before late September, 2015.
Edited by CN
