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Joe Taussig Benedicte Gravrand, Opalesque Geneva:
Here is another financial regulation spurred on by the trauma of the credit crisis, the past UBS investigation and the (justifiable) need for fresh capital to fill up those empty governmental coffers.
The Foreign Account Tax Compliance Act (FACTA) will come into effect in the U.S. on January 1st, 2013. It was signed into law to uncover taxable assets owned by U.S. citizens and held overseas, and this new law could help the government raise as much as $10bn annually.
According to Advent Software’s concise report on that regulation, this represents a significant modification of the U.S. foreign withholding tax system. Advent Software is a global provider of financial solutions.
Under FATCA – an acronym somewhat easy to remember -, non-U.S. institutions that fail to identify or disclose their U.S. account holders and investors will be subject to a 30% withholding tax on certain types of payment, which would include interest, dividends, sales proceeds, royalties and rents. Some 250,000 institutions could be affected.
These institutions will be required to follow due diligence procedures and to effect withholding on "recalcitrant accounts," which in turn will likely oblige them to implement new systems, procedures, and processes and to automate them as much as possible within the next 18 months, sa...................... To view our full article Click here
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