Foreign Account Tax Compliance Act
On 7 November 2012, the Treasurer announced that Australia had commenced formal discussions for an intergovernmental agreement with the United States to minimise the impact for Australians of the United States’ Foreign Account Tax Compliance Act (FATCA) in Australia.
FATCA was enacted by the United States Congress in March 2010 as part of its efforts to improve compliance with United States tax laws. FATCA will impose certain due diligence and reporting obligations on foreign (non-U.S.) financial institutions including Australian institutions.
A key objective of the intergovernmental agreement the Australian Government is negotiating with the United States Administration is to facilitate Australian compliance with FATCA in a way that reduces its overall burden on Australian business.
An intergovernmental agreement would also improve existing reciprocal tax information sharing arrangements between the Australian Taxation Office (ATO) and the United States Internal Revenue Service. This will help ensure Australian tax laws are effectively enforced so that Australian businesses and individuals who pay their fair share of tax are not disadvantaged by those who seek to evade their tax obligations.
For more information, refer to Media Release No. 110 issued on 7 November 2012 by the Treasurer.
Refer to the Treasury consultation page: Intergovernmental Agreement to Implement FATCA.