Responding, it said, to pressure from foreign financial institutions, the US today unveiled a less onerous version than it has previously of regulations covering the implementation of FATCA, its controversial new law aimed at cracking down on offshore tax evasion.
The Foreign Account Tax Compliance Act is due to begin taking effect on 1 Jan 2013, and foreign banks, trust administrators, asset managers and others have been keenly awaiting this last set of draft regulations, which had been expected before the end of December.
In the documents unveiled today, the US said it had agreed a deal with five European countries, including the UK, whereby financial institutions in these countries would forward the necessary data to the governments of the respective countries, which then would forward it to the US.
As reported, FATCA was signed into law in 2010 by President Obama in an effort to try to bring into the US tax net income realised by US citizens that was accumulating in undeclared bank accounts around the world.
In addition to the UK, the other European countries that have agreed to work with the US in enforcing FATCA are France, Germany, Italy and Spain.
For more on FATCA and what it is, click here.
To view the statement, click here.
To view the 388-page FATCA implementation document, ("Regulations Relating to Information Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities”) click here.
