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Alternative Market Briefing

Leveraging off FATCA offers route to tax dollars for more than the US

Friday, October 12, 2012

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Jim Muir
By Beverly Chandler, Opalesque London: Jim Muir, director of AutoRek, the financial services data reconciliation firm and an expert on the Foreign Account Tax Compliance Act (FATCA) believes that there is a lack of readiness in the marketplace for the implementation of FATCA, and there has been a belief that it would go the way of other regulation and just slip quietly away. "I think the industry collectively misjudged how determined the Americans were to do it" he says in an interview with Opalesque.

FATCA is designed to force US citizens living overseas to declare their assets in accounts with foreign financial institutions (FFIs). FFIs will have to enter into compliance agreements with the US Treasury by 30 June, 2013 in order to report on their US clients, or face a withholding penalty equivalent to 30% of the payments to FFIs.

Muir believes that there has been a further misjudgement in appreciating how much of an interest other governments have in FATCA. "If you are an investment centre that attracts international finance, say the UK, it’s in the interests of the UK for the Americans to succeed with FATCA, because having established the principal that globally there is no hiding place, the UK can either implement its own mini FATCA or a bilateral arrangement with say Switzerland and say 'we are not going to go the American way and we are not going to hold you......................

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