Passed into law in March of 2010, the HIRE Act is famous in part for introducing the Foreign Account Tax Compliance Act (FATCA), an information reporting regime designed to seek out undeclared foreign accounts held by US persons. FATCA requires Foreign Financial Institutions to perform substantial due diligence and reporting functions with respect to their account base or suffer 30% punitive withholding.
In addition to FATCA, this federal law requires all U.S. taxpayers (including US citizens living outside the states) to annually report their non-US financial accounts to the IRS. In fact, there are two separate reporting regimes: 1)FinCEN Form 114 (known colloquially as FBAR reporting) and 2) Form 8938 which is included with a taxpayer’s individual income tax return. Failure to file will result to a minimum penalty of $10,000 but may arise to as much as 40% of the value of the asset or account.
The unprecedented scope of FATCA dramatically changed the obligations of US withholding agents and foreign financial institutions, and triggered a sea change with regard to the automatic exchange of information between jurisdictions. Following FATCA, the United Kingdom implemented its own version, known as UK-CDOT, and the OECD released its Common Reporting Standard with over 100 participating jurisdictions. Understanding this tax reporting environment is crucial for taxpayers, particularly those acting as US withholding agents or involved in the financial industry, to be fully aware of the reporting requirements and compliance considerations that will help avoid future risks and financial loss.
In this LIVE Webcast, a panel of thought leaders and professionals assembled by The Knowledge Group will provide the audience with a comprehensive updates on the Foreign Account Tax Compliance Act, UK-CDOT, and CRS, highlighting relevant differences and commenting on what withholding agents and financial institutions should be doing right now.
Key topics include:
- Foreign Account Tax Compliance Act (FATCA) – Legal Framework
- Common Risks and Pitfalls
- Reporting Requirements
- Tax and Compliance Considerations
- Impact and Implications to U.S. Taxpayers
- Recent Trends and Developments