On 7 July 2016, Intergovermental Agreement ("IGA") Model 1 between Vienam and the U.S. Governments officially entered into force, accordingly, Financial Institutions ("FIs") in Vietnam officially became Reporting Vietnamese Financial Institutions ("PFFIs") Model 1.
Intergovermental Agreement - IGA in force
It is noted from the Internal Revenue Services (“IRS”) website that Vietnam hasbeen treated as having an IGA Model 1 in force on 7 July 2016. Accordingly, from 7July 2016, FIs in Vietnam are officially regarded as PFFIs Model 1.
Memorandum of Understanding clarifying critical points in IGA
A memorandum between the Governments of Vietnam and the US has alsobeen uploaded to the IRS website clarifying several critical points of the IGA. Thefollowings are notable:
In the coming time, the State Bank of Vietnam (“SBV”) and other competent authorities will soon issue detailed guidance on FATCA implementation in Vietnamin accordance with the signed IGA. KPMG recommends FIs to prepare resourcesin place to meet compliance requirements as soon as detailed guidance is issued.
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