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Tackling tax evasion: FATCA regulations ‘bring certainty’

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‘Final regulations’ implementing the Foreign Account Tax Compliance Act (FATCA) mark ‘a key step’ in establishing a common inter-governmental approach to combating tax evasion by US taxpayers using foreign accounts, the US Treasury and the Internal Revenue Service said.

The regulations issued on 17 January provide additional certainty for financial institutions and government counterparts, they added, ‘by finalising the step-by-step process for US account identification, information reporting, and withholding requirements for foreign financial institutions, other foreign entities, and US withholding agents’.

Detailed guidance on FATCA is provided on the websites of the US Treasury and the IRS. Jennifer Sponzilli, US tax partner at KPMG in London, said that while the regulations brought ‘much needed certainty’ to global financial institutions the implementation time frame remained ‘challenging, with the first effective date less than a year away’.