Ireland is one of the first countries to form a new inter-governmental agreement with the US on the Foreign Account Tax Compliance Act (Fatca).
The country’s finance minister Michael Noonan confirmed this week that the negotiations with the US have been concluded.
‘Our policies in relation to tax co-operation and international exchange of tax information have always earned international respect.
‘Reaching such an early agreement with the United States will be of benefit to Irish business.’
Ken Owens, former chair of the Irish Funds Industry Association (IFIA), said the move means Irish financial institutions can now avoid the need to enter an agreement with the IRS and instead report directly to the Irish Revenue authorities.
‘The main benefit for Irish financial institutions is the ability to avoid US withholding tax by virtue of the fact that Ireland has signed up to this Inter-governmental Agreement, and this is a really significant coup,’ said Owens.
‘This gives the Irish financial services industry a huge competitive advantage over other countries which may not be able to reach the same agreement with the US because of banking secrecy laws.’
According to the IFIA, Ireland attracted twice as much in new Ucits monies as the rest of Europe put together in 2011.