Fatca implementation raises question
The Foreign Account Tax Compliance Act (Fatca), designed by the Treasury Department, went into effect on January 1.
The law is aimed at foreign banks and financial companies in an effort to prevent them from abetting tax evasion by U.S. citizens via offshore accounts. The price of noncompliance with FATCA is a 30 percent chunk of U.S. income withheld, so companies would be wise to comply. The law is expected to have a big impact on U.S. companies with foreign affiliates as well as foreign companies with U.S. clients--eventually.
One expert thinks that the law is already losing momentum.
"Why do I feel FATCA is running out of steam?" asks Nigel Green, CEO of the deVere Greoup.
"Well, two reasons. Firstly, the US Treasury Department has again failed to meet its own end-of-year deadline to publish the FATCA rules, one of the key steps in its implementation. This is the second time that the Treasury Department has missed such a deadline – the first one came and went in September 2012. Secondly, to date, only the UK,Denmark,Ireland and Mexico, plus a handful of British Crown Dependencies, have signed FATCA's required Intergovernmental Agreement (IGA). The Treasury Department had hoped to finalise IGAs with many others, including Canada, France, Germany, Italy, Japan, Spain, and Switzerland before the end of 2012. It failed on that too. The optimist in me hopes that the FATCA machine stalling is the first sign that it could ultimately be repealed completely."
A missed deadline is hardly the death knell, but Fatca is clearly off to a slow start.
- here's the item
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