17 July 2013Accounting & tax analysis

FATCA delayed six months

The US Department of the Treasury and the IRS announced that the start date of the Foreign Account Tax Compliance Act (FATCA) will be pushed back by six months, to July 2014. The delay, according to the treasury, is in response to “overwhelming interest from countries around the world”.

The extension will provide foreign financial institutions additional time to comply with the incoming law. Once implemented the FATCA will require US financial institutions to withhold a portion of payments made to foreign financial institutions who do not agree to identify and report information on U.S. taxpayers.

Robert B. Stack, treasury deputy assistant secretary for international tax affairs, commented: “The high volume of international participation in this effort represents a quintessential race to the top. Every additional country we bring on board means we are one step closer to winning the fight against offshore tax evasion.”

The US has Intergovernmental Agreements with 9 countries and is engaged in related conversations with more than 80 jurisdictions.