IRDAI has issued uniform guidelines for insurers in order to ensure compliance with Foreign Account Tax Compliance Act (FATCA).
FATCA is an anti-tax evasion law under which financial entities are required to report information on US investors to U.S IRS (Internal Revenue Service) through CBDT. Simply put, the legislation is meant to prevent wealthy U.S individuals from parking money overseas to avoid paying taxes.
IRDAI said, “All insurers including General Insurance Corporation of India (GIC) are advised to register on the e-filing portal of the income tax department and take the necessary steps to comply with the reporting requirements.”
Further, IRDAI has given a deadline of March 31, 2016 to insurers to comply with these norms. Also, insurance companies have been mandated to issue new policies along with FATCA compliance form with immediate effect. Failing to ensure compliance with these norms will attract regulatory action, IRDAI cautioned.
The new FATCA declaration form will capture information like type of address (residence, business, registered office etc.), country of tax residence, tax identification number, Global Intermediary Identification Number (GIIN) and seek investors consent for sharing the information with relevant tax authorities.
Insurance intermediaries are expected to update the details of their existing foreign investors by adding this information by March 2016.