FATCA – the Foreign Account Tax Compliance Act – imposes US withholding taxes and compliance obligations on banks and financial institutions worldwide. Since it was enacted in 2010, FATCA has been widely criticised as over-broad and unworkable – with compliance potentially unlawful in many jurisdictions.
On Thursday 26 July 2012, the United States published a model intergovernmental agreement (IGA) with France, Germany, Italy, Spain and the United Kingdom (the G5). The aim is to simplify FATCA compliance for financial institutions in those jurisdictions.
We look at whether this aim has been achieved, and whether FATCA is now workable for financial institutions in the G5.
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