Sunday, 27 September 2015

IRS Delays FATCA to Help Banks, But Offshore Account Disclosures Continue

From Forbes –

“The Treasury Department is delaying part of FATCA, the Foreign Account Tax Compliance Act. Foreign banks get more time before they start handing over data about their U.S.-owned accounts to the IRS. Like Obamacare, FATCA was passed in 2010, and like Obamacare, it has staggered effective dates. Non-U.S. banks around the world must reveal American account details or risk big penalties.

Much of the 2010 law took effect in 2015, but it is still being rolled out. The big penalties on offshore banks who do not hand over Americans are withholding at 30% on most transactions. There has already been some withholding, but not in a big way. Now, the U.S. is pushing back the start of withholding for many types of transactions from 2017 until 2019. Banks worldwide are happy because they can get ready. Banks will try to avoid withholding whenever possible, and that will mean more pushing on account holders.”

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