News › Weekly Alert Article

Treasury proposes regulations to limit the US being used as a tax haven

USA
25 May 2016

The US enacted the Foreign Account Tax Compliance Act (FATCA) to uncover US persons who were hiding money in offshore financial institutions and similar investment vehicles. Taxand USA investigates further. 

To incentivise these foreign institutions to cooperate, the IRS threatened them with a stiff withholding tax on most payments generated from the United States. As a result, these institutions spent millions of dollars in a massive compliance effort to set up the infrastructure to capture and report the information to the US government.

While many business organisations and governments were not happy with FATCA, it is now accepted as just another piece of a much wider regulatory net in the global push for tax transparency and compliance. Nonetheless, tax authorities and non-governmental organisations abroad have questioned and criticised the US for imposing FATCA on the rest of the world while not doing enough to curb the use of the US as a tax haven.

Discover more: Treasury proposes regulations to limit the ability of foreign persons to use the US as a tax haven


Your Taxand contact for further queries is:
Juan Carlos Ferrucho
T. +1 305 704 6670
E. jferrucho@alvarezandmarsal.com

Quality tax advice, globally

Taxand's Take

Foreign persons who have these structures should study the implications that the proposed regulations will have on their overall tax structure.

Taxand's Take Author

Global Guide to M&A Tax 2016

Global Guide to M&A Tax 2016

The Guide provides an ‘at-a-glance’ insight into the tax treatment of mergers and acquisitions worldwide.