From Komfie Manalo, Opalesque Asia: The Foreign Account Tax Compliance Act also known as FATCA, is a U.S. tax legislation that was enacted in 2010 and due to come into force on January 1, 2013. Among other things, the purpose of FATCA is to compel non-U.S. banks, financial intermediaries, investment vehicles and certain insurance companies or Foreign Financial Institutions to report information on accounts held by U.S. persons to the IRS.
International law firm Clifford Chance on Tuesday issued a paper to give industry players a comprehensive look into the proposed FATCA regulations.
According to the law firm, the U.S. Treasury Department and the U.S. Internal Revenue Service recently published proposed regulations implementing FATCA which provide guidance on how the IRS will apply new U.S. tax compliance rules beginning in 2014 to non-U.S. banks, financial intermediaries and investment vehicles.
FATCA imposes a 30% withholding tax on certain payments to FFIs that do not enter into a formal agreement with the IRS. The withholding tax also is imposed on payments to certain persons that refuse to provide identifying information or waive the benefit of customer privacy laws that would prevent reporting to the IRS under an FFI Agreement.
Shane Brett, managing director at Global Perspectives, borrowed the label 'FAT CAT’ f......................
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