New Pressure Put on FATCA Countries to Comply
If foreign banks and other institutions don’t comply or if they are located in a non-compliant country, they and their account holders can be subject to an automatic 30% withholding tax on U.S.-source payments such as interest and dividends.
The Challenge of FATCA Implementation
Many partner countries have found it difficult to enact the domestic measures necessary to bring their IGAs into legal force. Until now, the U.S. has been relatively patient with these countries, offering them several deadline extensions and treating them as if they have an IGA in effect as long as they provide assurances of imminent compliance.
A recent IRS Announcement is seemingly the first indication that the U.S. government’s patience is running thin and it’s time for partner countries to comply or have their financial institutions face the FATCA consequences.
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