Everyone’s Getting FATCA Compliant
The worldwide landscape of transparency is changing as the United States works with other nations to increase information sharing around the world. Work to implement Foreign Account Tax Compliance Act (FATCA) is headlining these efforts to fight tax evasion.
Enacted in 2010, FATCA requires foreign financial institutions to tell the Internal Revenue Service about their U.S.-owned accounts or face, in some cases, a 30 percent withholding tax on certain U.S.-source payments that are made to them.
The Treasury Department is engaged in negotiating dozens of pacts, known as intergovernmental agreements (IGAs), that would allow financial institutions to report the information to their own governments, which then would share the information with the United States.
So far, FATCA has proved successful.
“Countries worldwide have demonstrated a strong interest in becoming transparent on that level,” Robert B. Stack, Treasury Deputy Assistant Secretary for International Tax Affairs, told Bloomberg BNA. “This interest shows how seriously countries around the world are taking this. FATCA has pushed that effort further and is rapidly becoming the global standard for exchange of information.”