FATCA (Foreign Account Tax Compliance Act)
US law mandating foreign financial institutions to share info on US-linked accounts.
Detailed Description
FATCA (Foreign Account Tax Compliance Act)
What is the main goal of FATCA?
The main goal of FATCA is to increase tax compliance among U.S. citizens and residents who may be hiding assets in foreign accounts to evade U.S. taxes.
Who is required to report under FATCA?
Foreign financial institutions (FFIs) are required to report information about accounts held by U.S. persons to the IRS.
What penalties exist for non-compliance with FATCA?
U.S. taxpayers may face penalties of up to $10,000 for failing to report foreign accounts, while FFIs may incur a 30% withholding tax on U.S. source payments.
Are there any exemptions to FATCA reporting requirements?
Yes, certain accounts held by governmental organizations, international organizations, and some retirement accounts may be exempt from FATCA reporting.
How has FATCA influenced global tax compliance measures?
FATCA has prompted many countries to enhance their own tax compliance measures and participate in information exchange agreements with the U.S.