U.S. Treasury signs pact with France for anti-tax evasion law
WASHINGTON (Reuters) - The United States has signed an anti-tax evasion agreement with France, the 10th country to join a U.S. global dragnet that goes into effect next July, the U.S. Treasury said on Thursday.
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, will from then require financial institutions abroad to disclose Americans' offshore accounts worth more than $50,000 to the tax-collecting U.S. Internal Revenue Service.
To implement FATCA worldwide, the U.S. Treasury Department is negotiating "intergovernmental agreements" (IGAs) with more than 50 countries. These pacts give financial institutions in those countries more certainty about what they must do to comply with FATCA.
With the French IGA signed, French banks and financial institutions will report information about U.S. customers' relevant offshore accounts to the French government, which will then send that information on to the IRS.
"This agreement demonstrates the growing global momentum behind FATCA and strong support from the world's most important economies," Deputy Assistant Secretary for International Tax Affairs Robert Stack said in a statement on Thursday.
The signing of the French IGA was delayed by a 16-day U.S. federal government shutdown in October, French officials have said previously.
The IGA is reciprocal, requiring the IRS to send France similar information about French account holders. This reciprocal arrangement has raised concerns among U.S. banks and some members of Congress.
The United States has signed nine other IGAs with Britain, Denmark, Germany, Ireland, Japan, Mexico, Norway, Spain and Switzerland. Of those, several are reciprocal.