WASHINGTON, July 26 The U.S. Treasury Department
on Thursday published new rules for international tax reporting
requirements, offering countries options for their domestic
banks to comply with pending U.S. tax laws.
Treasury announced two model agreements countries can sign
to give their home banks flexibility in reporting U.S. client
information on assets held abroad to the Internal Revenue
The rules are part of the U.S. 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.
One of the models is a reciprocal agreement where the IRS
will share taxpayer information with a foreign government about
its citizens' assets held in the United States. But reciprocal
information sharing would need approval from the U.S. Congress,
The other model agreement allows countries to comply with
FATCA without getting an exchange of client banking information.
The model agreements are based off of negotiations Treasury
announced in February with France, Germany, Italy, Spain and
Britain to set up government-to-government information-sharing
deals. The Treasury added Switzerland and Japan to the list in
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 James Dalgleish)