Thursday, November 8, 2012

U.S. Engaging with More than 50 Jurisdictions to Curtail Offshore Tax Evasion


The U.S. Department of the Treasury today announced that it is engaged with more than 50 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 U.S. 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, 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 Treasury is in the process of finalizing an intergovernmental agreement and with which 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 Treasury is actively engaged in a dialogue towards 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. Treasury expects to be able to conclude negotiations with several of these jurisdictions by year end.
 
The jurisdictions with which 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.

FATCA Problems???             Have a Foreign Bank Account???   

Contact the Tax Lawyers at Marini& Associates, P.A. for a FREE Tax Consultation at: www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).

 

2 comments:

  1. Brian, here is some of the best analysis of the Treasury announcement I have read, that isn't just an rehash of what Treasury said, with admonishments by the FCC to hurry up and comply.

    It starts like this...

    "Regarding Treasury’s announcement of negotiations with multiple countries, we need to see that there’s both more and less here than meets the eye. Consider:"....

    You can read more here... http://bit.ly/TR7LG0

    Posted by Marvin Van Horn

    ReplyDelete
  2. If there was ever a doubt that FATCA is the Tip of the Spear for a GATCA, a global tax exchange, this should remove it.

    http://www.stepjournal.org/journal_archive/2012/step_journal_november_2012/foreign_there%E2%80%99s_no_%E2%80%98f%E2%80%99_in.aspx?link=contentMiddle%20contentMiddleWide

    "The UK parliament’s International Development Committee, quoting the Tax Justice Network, Christian Aid and Glencore, has called for the government to ‘introduce legislation similar to the relevant section of [FATCA], requiring tax authorities automatically to exchange information relating to UK citizens or corporations. The government should also use its influence (via the OECD Tax and Development Task Force, and similar avenues) to persuade other governments to follow suit4."

    The only way this gets derailed, if Congress grows a pair and stops the IRS DATCA dead in its tracks. These efforts at forcing US Financial Institutions provide the tax data for reciprocal IGA arrangements is expatriating the cost of FATCA back onto US shores. This might be overstepping IRS statutory power, but if Congress doesn't respond, than the IRS and the FATCANATICs have the upper hand. Bureaucrats rule. Consequences be damned!

    If you didn't live on this little blue globe, and just a dispassionate observer from afar, I think this struggle to create a GATCA is one of the most interesting economic and regulatory developments in recent history. Too bad the US media is asleep and not interested. I think this is much worse than Frank Dodd, or Basil II when it comes to economic impacts that will ripple around the world. Do these guys really think that Capital flows will just happily surrender to GATCA certainty? Time will tell.

    Posted by Marvin Van Horn

    ReplyDelete