European banks are bracing themselves for the United States’ FATCA (Foreign Accounts Tax Compliance Act). At a conference staged in Rome on 1 February by the European Banking Federation (EBF), hosted by the Italian Banking Association, practitioners and experts of the banking sector from Europe and the United States gathered with representatives of national tax administrations, the OECD (Organisation for Economic Co-operation and Development) and the European Commission to discuss the implications of implementing FATCA.
When drafting FATCA, the US authorities originally aimed at fighting tax fraud and off-shore tax abuses by US citizens. FATCA has now, however, turned into a catalyst for an entirely new international fiscal landscape, in which financial intermediaries like banks are increasingly required to play the role of tax intermediaries and to report detailed information on investors. The EBF stresses that this is clearly not the role of banks.
During a one-hour video-conference, Attorneys of the US Internal Revenue Service answered questions on the final Regulations which were issued mid January 2013 and will enter into force on 1 January 2014.
There are, however, a number of essential parts still missing, as well as actual guidance, which complicates the efforts of the international financial industry to be ready on time.
By Roger Kaiser, Adviser : R.Kaiser@ebf-fbe.eu