Karl J. Paulson Egbert Beverly Chandler, Opalesque London: Reporting from Dechert in Hong Kong, Karl J. Paulson Egbert finds that earlier hopes that the financial services industry in Asia could begin to make sense of FATCA’s obligations when the U.S. Department of the
Treasury ("Treasury") and Internal
Revenue Service ("IRS") issued
proposed regulations relating to the
Foreign Account Tax Compliance Act
("FATCA") earlier this year have been dashed, with the FATCA legislation still offering a compliance challenge.
Paulson Egbert writes of comment letters from Asian trade groups from a variety of Asian
jurisdictions, including Hong Kong, Singapore, Japan
and Australia which reflected the unique obstacles each faced
with FATCA compliance, but beyond that, a general unease with FATCA’s
scope, as well as skepticism that FATCA’s rewards
(an estimated US$1 billion in additional tax revenue
annually) justified its expenses.
Paulson Egbert writes: " Generally, FATCA
attempts to combat U.S. tax evasion by requiring that
non-U.S. financial institutions report the identities
of U.S. shareholders or clients — or face a 30%
withholding tax on their U.S. source income. But
comment letters from higher tax jurisdictions in Asia
questioned whether U.S. tax evaders would cheat on
their U.S. taxes only to pay local taxes elsewhere".
In addition, comment letters from bot......................
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