The US has signed bilateral agreements with a six more jurisdictions, including several traditional offshore tax havens, to improve tax compliance, combat international tax evasion, and implement FATCA.
Past week Bermuda, Malta, the Netherlands, and three UK Crown Dependencies joined 12 others juurisdictions bringing the total number of signed FATCA intergovernmental agreements to 18.
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Under the agreement, US financial institutions must withhold a portion of certain payments made to foreign financial institutions (FFIs), which do not agree to identify and report information on US account holders.
According to media report, the US has 11 more agreements in substance and is in discussions with many other jurisdictions.
According to these reciprocal agreements, the US government will provide similar tax information to these governments about individuals and entities from their jurisdictions with accounts in the US.
Under the FATCA law, foreign financial institutions (FFIs) will require to report to the IRS information about financial accounts held by US taxpayers. FATCA, which was enforced by Congress in 2010, requires information reporting and withholding tax provisions that target non-compliance by US taxpayers using foreign accounts.
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