On 8 February 2012 nearly two years after the US legislation commonly known as ‘FATCA’ (Foreign Account Tax Compliance Act) was enacted the US IRS has released 388 pages of proposed FATCA Regulations. Simultaneously the governments of the US UK France Germany Italy and Spain have issued a joint statement agreeing ‘to explore a common approach’ to implementing FATCA that contemplates reciprocal tax information reporting by US financial institutions.
FATCA is intended to provide the IRS with details of accounts held by US citizens with Foreign Financial Institutions (FFIs). The scheme of it is to require FFIs to sign up to disclosure agreements with the IRS or face 30% withholding on US-related payments.
