FATCA, And Where To Find It

FATCA, And Where To Find It

Submitted by Steve Formica on Wed, 09/25/2013 - 16:07 in

The Foreign Account Tax Compliance Act, or FATCA, as enacted by Congress in 2010, targets non-compliance by U.S. taxpayers using foreign accounts. It requires individuals to report their financial accounts held outside of the United States and foreign financial institutions to report to the U.S. Department of the Treasury, Internal Revenue Service (IRS) about their American clients. It was designed primarily to combat offshore tax evasion and recoup federal tax revenues.

The IRS has issued comprehensive regulations implementing the information reporting and withholding tax provisions in FATCA. These regulations mark a key step in establishing a common “intergovernmental” approach to combating tax evasion. These regulations provide additional certainty for financial institutions and government counterparts. This is accomplished by finalizing the step-by-step process for U.S. account identification, information reporting, and withholding requirements for foreign financial institutions (FFIs), other foreign entities, as well as U.S. withholding agents.

The U.S. requirements include the reporting requirement of several IRS forms, Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, and Form 8966, FATCA Report.

Additionally, the United States has collaborated with other governments to develop two model intergovernmental agreements (IGAs) to implement FATCA.

Specific FATCA requirements contained in the Fontis Legal Data Service include various parts of 26 CFR 1.1471 through 1.1474, 301.1474-1, the UK Finance Act 2013, the UK International Tax Compliance (United States of America) Regulations 2013 (SI 2013/1962), and the 9 Intergovernmental Agreements (IGA) with 3 Joint Statements that are in effect as of this writing. These can be designated as “Global” on the Fontis system, and they cover Japan, Germany, Spain, Norway, Switzerland, Ireland, Mexico, Denmark, UK, France and Italy.