WASHINGTON, Jan 10 (Reuters) - The U.S. Treasury Department on Friday said it signed an anti-tax evasion pact with Italy, which became the 13th country to sign such a deal with the United States.
The agreement came ahead of the implementation in July of a new law to crack down on offshore tax avoidance by Americans, the Foreign Account Tax Compliance Act (FATCA).
Enacted in 2010, the law requires 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, Treasury is negotiating “intergovernmental agreements” (IGAs) with more than 50 countries.
With the Italian IGA signed, Italian banks and financial institutions will report information about eligible U.S. customers’ offshore accounts to the Italian government, which will then send that information to the IRS.
The IGA is reciprocal, requiring the IRS to send Italy similar information about Italians with financial accounts in the United States. This arrangement has raised concerns among U.S. banks and some members of Congress.
“We welcome Italy’s commitment to strengthening its cooperation with the United States in improving tax compliance,” Deputy Assistant Secretary for International Tax Affairs Robert Stack said in a statement on Friday.
Italy was one of the first countries to participate with the United States on FATCA. In February 2012, Italy joined with four other European countries to sign a FATCA framework. (Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Nick Zieminski)