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US Issues Final FATCA Regulations

On January 17, 2013, the United States Treasury Department and the Internal Revenue Service (IRS) issued comprehensive final regulations implementing the information reporting and withholding tax provisions for foreign financial institutions (FFIs) under the Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted by Congress in March 2010 and is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest, with FFIs. Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.