FATCA Sets Stage for EU Clamp Down on Tax Evasion

The enactment of FATCA has ramped up negotiations at the EU and OECD level on how to improve the implementation of taxing cross-border investment income – Published on CFO Insight, by William Amofah, April 29, 2013.

The attention paid to the elimination of tax havens by policymakers and the media has increased in recent times. One of the main reasons for this, according to Deutsche Bank Research, is the implementation of FATCA by the United States.  

The law, passed in 2010, is aimed at foiling tax evasion by US citizens. Faced with the threat of being sanctioned with a 30% withholding tax, banks are now being squeezed by authorities to provide information about accounts outside of the US held by American citizens. The law, however, has not been well received by the public. Last year, Herman B. Bouma, a lawyer at Buchanan Ingersoll & Rooney PC, described the law as “sheer idiocy.”

Nevertheless, the legislation has spurred negotiations at the EU and OECD levels on how to improve the taxation of cross-border investment income. At the European level this includes the expansion of the Savings Taxation Directive – an agreement between EU member states to automatically exchange information with each other about customers who earn income abroad … //

… (full text).

Links:

Foreign Account Tax Compliance Act FATCA:

Bermuda to sign Model IGA 2 for USA and UK FATCA, on BDA Sun online, April 30, 2013;

US eyes FATCA pact for info on Americans’ assets in India, on The Economic Times, April 28, 2013;

FATCA brings serious disadvantages for Switzerland as a sovereign state, on Current Concerns, by Hans Geiger, April 28, 2013;

REGULATION/COMPLIANCE: Devil in the Data, Making the FATCA Deadline Requires Automation, on BankTech, by Erik Christensen and Aaron Kahler, April 25, 2013;

Investment strategies for US clients faced with FATCA, on International Adviser, by Daniel Freedman, April 24, 2013;

Hans Geiger: Geld wird kriminell, auf seinem Blog;

U.S. Treasury, FATCA Resource Center;

FATCA timeline from the Thomson Reuters FATCA site;

FSI Tax Posts;

FATCA Information from the US Internal Revenue Service IRS.

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