Wednesday, 18th September 2013
UK: The International Tax Compliance (United States of America) Regulations 2013
Source: HM Revenue & Customs (UK)
HM Revenue & Customs (HMRC) is introducing regulations to allow businesses to comply with their due diligence and reporting obligations under the agreement ("the Agreement") reached between the Governments of the United Kingdom and the United States of America to improve international tax compliance and implement FATCA. FATCA refers to the US provisions known as the Foreign Account Tax Compliance Act.
The regulations enact the Agreement and allow UK businesses to collect and provide information on specified US persons, to HMRC.
In 2010 the US introduced FATCA to combat tax evasion by US tax residents using foreign accounts. It includes certain provisions on withholding taxes and on the reporting of information by foreign financial institutions for US compliance purposes. Failure to meet these new reporting obligations will result in a 30 per cent withholding tax on the US source income of the financial institution.
The legislation introduced by the US imposes new and substantial burdens on UK businesses in identifying US taxpayers, and registering and reporting information to the IRS. Significantly for UK institutions the Data Protection Act precludes UK businesses from passing the required information directly to the US.
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By Adrian Janes
Having begun his career in academic libraries, Adrian Janes has subsequently worked extensively in public libraries, chiefly in enquiry work as an Information Services librarian. In this role he has had particular responsibility for information from both the UK Government and the European Union. He wrote a detailed report on sources for the latter which was published by FreePint in 2007, and has contributed articles to FreePint and ResourceShelf. He is involved in training in information literacy and the use of online reference resources.
A Contributing Editor to DocuTicker, he also write reviews for Pennyblackmusic.
Adrian can be reached at firstname.lastname@example.org
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