This month the IRS released a list of 50 countries that are on the road to signing an IGA – either finalising models for IGAs, engaged in dialogue for pursuing an IGA or conducting initial negotiations. China was not on the list as being at any level of negotiation with the IRS. This is significant, according to Dan Niedle, a London-based tax partner at law firm Clifford Chance.
“The interesting question about the list is who’s not on it at all. And China is the obvious one,” he says. “There are lots of rumours. Early on it was reported that China might just ban its financial institutions from taking part and dare the US to impose withholding taxes.”
Again this re-iterates the need for Canada and other countries not to enter into IGA’s.