U.S. Treasury to release foreign tax pact rules within days
WASHINGTON, July 24 |
WASHINGTON, July 24 (Reuters) - The U.S. Treasury Department will release before the end of July new compliance rules for foreign governments eager to cooperate with looming U.S. tax laws and spare their domestic banks from U.S. fines, a Treasury official said on Tuesday.
The comments were made Michael Plowgian, an attorney advisor in the Treasury office of Internal Tax Counsel, speaking to the tax and legal news service BNA. A Treasury spokesperson confirmed Plowgian's comments.
The expected rules are part of Treasury's implementation of the Foreign Account Tax Compliance Act, or FATCA, a 2010 anti-tax evasion law.
The United States will begin penalizing foreign banks in 2014 for failing to disclose information to government authorities about clients who are U.S. citizens.
Some banks have complained they cannot comply with the FATCA law as well as their own domestic privacy laws.
To remedy this problem, the anticipated Treasury rules will offer a FATCA compromise for banks, allowing them to report some client information to their home governments and some data directly to the U.S. Internal Revenue Service.
Washington is already negotiating agreements with seven countries to collect banks' client information: France, Germany, Italy, Spain, Britain, Switzerland and Japan.
These agreements are expected to serve as the blueprint for more countries to cooperate with Treasury, Plowgian said.
Banks in countries that do not sign up with Treasury will need to report client tax information directly to the IRS. Banks that do not share client information with the IRS face up to a 30 percent withholding tax beginning in 2014. (Reporting By Patrick Temple-West; editing by Kevin Drawbaugh, Gary Crosse)
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