1. What is FATCA?
FATCA is the Foreign Account Tax Compliance Act enacted into law on March 18, 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. It is a new regime for finding income overseas as a response to a landmark court case in which a large international bank agreed to pay $780 million in fines for their role in assisting U.S. citizens in ... read more »
FATCA Key Requirements
The Foreign Account Tax Compliance Act (FATCA ) is targeted at getting financial information about individuals currently living in the United States and abroad who should be paying taxes to the U.S. government. FATCA requires that foreign financial institutions (FFIs) and U.S. withholding agents collect tax data from their account holders tax data ... read more »
FATCA: 4 Step Process
The overall FATCA process is complex, but it can be reduced to three distinct phases. First, identify which accounts are taxable under U.S. law. Next, report income and asset information to the IRS in the correct format. Finally, withhold 30% of payments from recalcitrant and non-participating accounts and remit appropriate payments to the IRS ... read more »
Model I & Model II IGAs
FATCA intergovernmental agreements are designed to make it easier for foreign financial institutions to comply with FATCA. The U.S. Treasury Department released a draft of a Model I IGA in July of 2012. A draft of a Model II IGA followed in November of the same year ... read more »
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