As the growth of global tax transparency rises, individual taxpayers and financial institutions must exercise new levels of caution.
With more than 100 intergovernmental agreements (IGA) under the Foreign Account Tax Compliance Act (FATCA) and many countries participating in the Organization for Economic Cooperation and Development’s (OECD), a new level of transparency is emerging.
“I think the world’s changing,” said Alan Granwell, of counsel with Sharp Partners PA. “The significant issue is global transparency. Look at where we were a few years ago. We were nowhere. I think the difference is really incredible.”
Many practitioners have noted that banks and financial institutions have made a concerted effort to prepare for the next stage of reporting expected in 2015.
“I think many institutions are in pretty good shape,” said Jonathan Jacket, a partner at Burt, Staples, & Maner. “They had a plan and they worked through their plan. Many are on schedule and they’ve done what they need to do.” The question remains, however, “Is it the best version? Is it as good as it could be?” he told Bloomberg BNA. “We won’t find that out for sure until we’ve gone through a few cycles of reporting.”
March 15 kicked off the staggered implementation of several new phases of reporting, a major point in global tax transparency. “It’s the real start,” said Susan Grbic, a tax partner at WeiserMazars LLP. “It’s exciting that it’s happening. This is the beginning of real FATCA, of fully implementing and working out wrinkles and discrepancies between the different types of reporting that will be required.”