FATCAThe provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
•FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
•FATCA focuses on reporting:
•By U.S. taxpayers about certain foreign financial accounts and offshore assets
•By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
•The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
Convention on Mutual Administrative Assistance in Tax Matters
The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended by Protocol in 2010. The Convention is the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance, a top priority for all countries.
The amended Convention facilitates international co-operation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers. The amended Convention provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.