TALKS that have just kicked off between the US and Irish tax authorities could ultimately lead to tens of millions in savings for Irish financial companies and increase the attractiveness of Ireland's banking and fund sector, a fund sector lobby group said.
The Revenue Commissioners confirmed yesterday that it had begun negotiations with the US government to provide a common, centralised response (along with some other EU countries) to the Foreign Account Tax Compliance Act (FATCA) -- the controversial US legislation designed to clamp down on offshore tax leakage by US citizens.
The legislation will cause recipients of US money who insist of remaining unidentified, or remain unidentified by their institutions, to have 30pc of their money withheld.
The Irish Funds Industry Association (IFIA) believes the start of the talks with the US revenue authorities represents a significant breakthrough for Irish financial institutions which, it says, have little to hide relative to some of their foreign-based competitors based in more secretive banking regimes.
Ken Owens, of PricewaterhouseCoopers (PwC) and chairman of the IFIA, added: "By permitting Irish foreign financial institutions to deal with the Revenue Commissioners here, rather than the US-based IRS, they will be saving a significant amount in costs.
"Irish financial institutions and companies have a long history of being tax compliant with other countries, which means that we have little to hide.
"Therefore, becoming compliant with FACTA presents less of a problem for us than it might do for some of our sector's competitors located in other countries, most notably Luxembourg.
"The day of secretive banking is on the way out and those countries which conform quicker to this sort of legislation will benefit as a result."