The Internal Revenue Service is giving overseas banks an additional year before they will have to make any withholdings from U.S. customers who fail to disclose enough identifying information to U.S. tax collectors.The second round of IRS guidance issued today on the Foreign Account Tax Compliance Act, or FATCA, doesn’t require banks to make 30 percent withholdings on non-compliant U.S. customers until Jan. 1, 2014. Other withholdings on gross proceeds and income that might be indirectly sourced to the U.S. won’t start until Jan. 1, 2015.
The requirements, which Congress approved last year, were originally slated to take effect at the beginning of 2013. Today’s announcement is intended to address the concerns of overseas financial institutions, including Toronto-Dominion Bank (TD) of Canada, Allianz SE (ALV) ofGermany and Aegon NV (AGN) of the Netherlands, which have said the proposal is too complex.
- TD opposes U.S. plan to catch tax cheats (business.financialpost.com)
- While Prosecutors Nail Banks Over Offshore Tax Abuses, Lobbyists Push To Delay New IRS Rules (huffingtonpost.com)
- New Report Released by American Citizens Abroad (ACA) Shows Devastating Consequences of FATCA Legislation (prweb.com)
- AEGON pays off $4.3 billion Dutch State loan (thegazette.com)
- IRS Issues New Guidelines For Overseas Accounts (online.wsj.com)
- Are Taxes Causing the Rich to Renounce Their Citizenship? (blogs.wsj.com)
- U.S. delay in tax-evasion crackdown heartens Ottawa(theglobeandmail.com)