Combating Offshore Tax Evasion, Implementing FATCAby
The US Department of the Treasury announced November 8 that it is engaged with more than fifty countries and jurisdictions around the world to improve international tax compliance and implement the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). Enacted by Congress in 2010, these provisions target noncompliance by US taxpayers using foreign accounts. Treasury's engagement with this broad coalition of foreign governments to efficiently and effectively implement FATCA marks an important milestone in establishing a common intergovernmental approach to combating tax evasion.
"Global cooperation is critical to implementing FATCA in a way that is targeted and efficient", said Treasury Assistant Secretary for Tax Policy Mark Mazur. "By working cooperatively with foreign governments and financial institutions, we are intensifying our ability to combat tax evasion while minimizing burdens on financial institutions."
This summer, the Treasury published a model intergovernmental agreement for implementing FATCA and announced the development of a second model agreement. These models serve as the basis for concluding bilateral agreements with interested jurisdictions.
The Treasury Department has already concluded a bilateral agreement with the United Kingdom. Additional jurisdictions with which the treasury is in the process of finalizing an intergovernmental agreement, and with which the Treasury hopes to conclude negotiations by year-end include: France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Guernsey, Ireland, Isle of Man, Jersey, Mexico, the Netherlands, and Norway.
Jurisdictions with which the Treasury is actively engaged in a dialogue toward concluding an intergovernmental agreement include: Argentina, Australia, Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea, Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore, and Sweden. The Treasury expects to be able to conclude negotiations with several of these jurisdictions by year-end.
The jurisdictions with which the Treasury is working to explore options for intergovernmental engagement include: Bermuda, Brazil, the British Virgin Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg, Romania, Russia, Seychelles, Sint Maarten, Slovenia, and South Africa.
The Treasury Department will continue its outreach to interested jurisdictions that wish to consider an intergovernmental approach to implementing FATCA, including participation in a meeting hosted by the Qatar Central Bank in early December to provide information about FATCA and the intergovernmental agreements to invited senior government officials and financial institutions in the Gulf Cooperation Council.
The Treasury Department and the IRS will finalize the regulations implementing FATCA in the near term. Updates and further information on FATCA can be found by visiting the Treasury FATCA page at http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx.
- Treasury Department Unveils Model FATCA Agreement
- IRS Posts Draft Revised Withholding Forms Conforming to FATCA
Source: November 8, 2012, US Department of the Treasury Press Release