Intergovernmental agreement (IGA) on the Foreign Account Tax Compliance Act (FATCA)
On 3 April 2015, a Model 1 IGA between the Government of the United States of America and the Government of the Republic of Uzbekistan to Improve International Tax Compliance and to Implement FATCA was signed. Uzbekistan approved the IGA as of 5 July 2017, and the Ministry of Foreign Affairs of Uzbekistan was ordered to notify on completion of domestic procedures. The IGA is in force starting 7 July 2017.
More than 110 countries around the world have concluded IGAs on FATCA with the United States, while, as per a statement by the US Embassy in Uzbekistan, Uzbekistan is the first country in Central Asia to sign an IGA on FATCA with the United States.
The IGA will ensure compliance with US tax laws for US citizens working in Uzbekistan. According to the FATCA regulations, foreign financial institutions (FFIs) (i.e. all financial institutions outside of the United States) are faced with disclosure requirements regarding their account holders who are US persons. This means that FFIs in Uzbekistan are obligated to periodically transmit information on financial accounts held by US persons to the US Internal Revenue Service (IRS) or face a 30% WHT on payments made from the United States. In order to fulfil this obligation, FFIs should implement procedures to ensure information collecting systems are in place and required information in respect to US investors is duly reported to the US IRS.