Tuesday, September 17, 2013
New York Times DealBook: Complying With U.S. Tax Evasion Law Is Vexing Foreign Banks, by Lynnley Browning:
A sweeping new federal law has a seemingly simple goal — curbing offshore tax evasion by Americans through foreign banks, trusts and shell companies. But behind the scenes, foreign banks and financial firms are increasingly finding that complying with the law is a major headache.
Treasury Department officials say they are moving apace in getting the world’s banks on board with the law, the Foreign Account Tax Compliance Act. They say they have reached agreements with some large countries, are working on deals with others and are refining parts of the law, which is set to take effect on June 30, 2014.
But some financial institutions, trade groups, scholars and members of Congress have raised an array of concerns, starting with the cost of creating the complex computer systems needed to track Americans’ accounts.
In addition, tax havens like China, Panama and Russia have yet to sign on. And American banks are unhappy about a Treasury Department pledge to foreign banks, not part of the original law, to require American financial institutions to share data with other countries about foreign investors who have accounts in the United States.