July 1, 2014, marks the date when withholding under the US Foreign Account Tax Compliance Act (FATCA) first begins to apply. Aimed at addressing perceived tax evasion and avoidance by US persons through the use of offshore accounts, FATCA has a wide-ranging impact on non-US entities that receive, directly or indirectly, many types of US-source income. Additionally, US entities that make payments of many types of US-source income to non-US persons are also affected by the new rules.
In the video interview, Tax partner John Harrington, former international tax counsel for the Department of Treasury, provides an overview of FATCA. In the video, John explains why companies should be actively preparing for the new compliance provisions, even if 2014 and 2015 are considered a “transition period” by the IRS. More specifically, he examines:
- The broad impact of FATCA and intergovernmental agreements (IGAs);
- The importance of planning for FATCA’s series of compliance deadlines; and
- New reporting requirements and expectations under the global information automatic exchange.
