FATCA – Which Countries Are In And Out
FATCA – Which Countries Are In And Out
The controversial US Foreign Account Tax Compliance Act (FATCA) law is set to start from July 1, 2014, so with less than 21 days to go, here’s a look at which countries are in and who is outside of the tax network.
The latest figures from the US Treasury suggest 72 countries are at various stages of FATCA compliance.
Signed and sealed
The Treasury has announced completed FATCA agreements to automatically swap tax data with 30 countries:
Australia
Belgium
Bermuda
Canada
Cayman Islands
Chile
Costa Rica
Denmark
Finland
France
Germany
Gibraltar
Guernsey
Hungary
Ireland
Isle of Man
Italy
Jamaica
Japan
Jersey
Malta
Mauritius
Mexico
Netherlands
Norway
Slovenia
South Africa
Spain
Switzerland
United Kingdom
Agreed in principle
Another 25 countries have agreed FATCA treaties with the US in principle and are considered FATCA compliant even though the agreements are awaiting final signature:
Austria
Azerbaijan
Bahamas
Brazil
British Virgin Islands
Bulgaria
Croatia
Cyprus
Czech Republic
Estonia
Hong Kong
India
Israel
Kosovo
Latvia
Liechtenstein
Lithuania
New Zealand
Poland
Portugal
Qatar
Romania
Singapore
Slovak Republic
South Korea
Under negotiation
Negotiations to put a FATCAQ treaty in place are under way with a further 17 countries:
Argentina
Bahrain
Barbados
Curacao
Ghana
Gibraltar
Honduras
Lebanon
Luxembourg
Malaysia
Russia
Seychelles
St Maarten
Taiwan
Thailand
Trinidad and Tobago
United Arab Emirates
Russia is the odd man out. Because of the violence and political crisis in The Ukraine, the US Treasury has refused to negotiate a FATCA treaty with Russia. Instead, Russian banks must comply by signing up individually on the FATCA portal.
FATCA FFI list
The first list of FATCA compliant foreign financial institutions (FFI) reporting outside international government agreements had more than 77,000 banks and other foreign financial institutions detailed. The next list is due on July 1, 2014.
What is FATCA?
FATCA is a law aimed at identifying US taxpayers controlling bank accounts and investments overseas who are not declaring any taxable income or chargeable gains.
The US Internal Revenue Service (IRS) intends to cross-reference financial reports from foreign tax authorities and banks against US tax returns to make sure any US taxpayer with overseas assets is paying the correct amount of tax.
In return, under many of the inter government agreements; the IRS will give reciprocal financial information about the financial affairs of foreign nationals with bank accounts and investments in the USA.
Banks failing to comply with FATCA face heavy fines and other sanctions that could stop them trading.
