Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S., 5 Others Strike Agreement to Combat Offshore Tax Evasion

07/26/2012 | 09:24am US/Eastern
Recommend:
0

--Treasury releases model agreement to obtain U.S. taxpayer information through foreign governments

--One version of agreement requires the U.S. to exchange information about foreigners that it collects from domestic banks

--Agreement developed with U.K., France, Germany, Spain and Italy

(Adds details about Thursday's agreement starting in the third paragraph and additional background throughout.)

   By Eric Morath 
 

WASHINGTON--The U.S. Treasury released a model agreement struck with five European nations Thursday that will allow for the enforcement of a law that targets offshore tax evasion.

The agreement, which still must be finalized, would create a new global regulatory system to prevent Americans from dodging taxes through foreign accounts, including a plan to obtain U.S. taxpayer information through foreign governments.

One version of the model released Thursday would require the U.S. to exchange information about foreigners that it collects on accounts held in domestic financial institutions, the Treasury said.

The provisions developed alongside the U.K., France, Germany, Spain and Italy are essential to the U.S. enforcing the Foreign Account Tax Compliance Act, passed in 2010.

The so-called Fatca rules, require foreign financial institutions to start reporting detailed information about U.S. account holders to the Internal Revenue Service in coming years. If the firms don't comply, they could face U.S. tax penalties.

The negotiations among the six countries created two versions of the agreement. The "reciprocal version" includes a policy commitment for the U.S. to pursue regulations and legislation that would provide for equivalent levels of exchange as it demands from other countries. Treasury said that version will be available to certain governments, on a case-by-case basis.

Thursday's model agreement "is an important milestone in our joint efforts to combat offshore tax evasion and make our tax systems more efficient and fair," Treasury Secretary Tim Geithner said in statement.

Mr. Geithner said the model agreement allows Fatca to be implemented in a "targeted and effective" way.

Banks have expressed concerns about the burdens the law creates.

Both versions of the agreement, however, allow for foreign financial institutions to report the necessary information to their respective tax authorities, helping to avoid duplicative efforts. Then the information would be subject to exchange under existing bilateral tax treaties or similar deals.

Thursday's model builds upon a commitment made by the six countries in February, but could be followed by other countries as well. Last month, Treasury announced deals with Japan and Switzerland to allow banks in those countries to comply with law.

Write to Eric Morath at eric.morath@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Recommend :
0
React to this article
Latest news
Date Title
<1m ago GETINGE : 2014.10.01 Getinge announces date of 2014 Q3 report and conference call
<1m ago PRICE & TIME : NZD/JPY Bear Pattern Hangs in the Balance
<1m ago AIR : Announces Acquisition of AMK Technical Services of South Windsor Connecticut
<1m ago TeliaSonera International Carrier Expands Network Into TELEHOUSE New York Chelsea Data Center
<1m ago WAVE SYSTEMS : Gartner Positions Wave Systems as Visionary in 2014 Magic Quadrant for Mobile Data Protection
<1m agoDJEUROPE MARKETS : European Stocks Fall; ECB Watched For Stimulus Details
<1m ago TERRANE METALS : Tribute Pharmaceuticals Announces Acquisition of Canadian Rights to Fiorinal®, Fiorinal® C, Visken® and Viskazide®
<1m ago LPP COMBUSTION : to Demo LPP Oilfield Power System Fueled by Natural Gas Liquids From Bakken Oilfield Production, Flare-Gas Byproduct at North Dakota State University
1m ago MANHATTAN SCIENTIFICS : Issues Follow up Report to Shareholders -"Pushing the Limits of Cancer Detection"
2m ago SERVICENOW : TeamUltra to demonstrate latest ServiceNow Custom Apps, services and solutions at NowForum; Platinum sponsor’s customer Spirit Pub Company to present case study on how it improved management of customer feedback
Latest news
Advertisement
Hot News 
XAAR : To Slash Costs As It Lowers Revenue Guidance On China Weakness
ORDINA : investigates Zembla claims: initial findings reveals no irregularities
INTERQUEST : Recruitment in Tunbridge Wells highlighted in Recruitment International
MASIMO : Philips Electronics to appeal ruling in $467 million patent lawsuit
GENERALE DE SANTE : Change of control and refinancing of Générale de Santé
Most Read News
8h ago TESLA MOTORS : Musk says 'about time to unveil the D and something else'
1d ago JANUS CAPITAL : Pimco Total Return Fund posts record $23.5 billion net outflow in September
1d ago JPMORGAN CHASE : to Present at the Bank of America Merrill Lynch Banking & Financial Services Conference
1d ago TOTAL SYSTEM SERVICES : Pimco Total Return Fund posts record $23.5 billion net outflow in September
1d ago CANADIAN PACIFIC RAILWAY : CP Rail looks to boost revenue to C$10 billion in 2018
Most recommended articles
3m ago Maserati sees sales topping 35,000 this year
5m ago Draghi may have to consider QE later - Dixon
6m agoDJEurope Stocks Stay Low, Euro Steady -- 2nd Update
15m agoDJECB Leaves Rates Unchanged
15m ago WALT DISNEY : Angry Birds maker Rovio to cut up to 130 jobs
Dynamic quotes  
ON
| OFF