Demanding Greater Transparency Article Written by Jonathan Treadway
Cayman Captive | 2012 edition
On March 18, 2010, the US enacted the Hiring Incentives to Restore Employment Act of 2010 (HIRE Act). As adopted, the HIRE Act includes a slightly modified version of another previously proposed bill, the Foreign Account Tax Compliance Act (FATCA ), and adds new sections 1471 through 1474 to the US Internal Revenue Code. The FATCA provisions within the HIRE Act are intended to close perceived gaps in information reporting to the Internal Revenue Service (IRS) and curb perceived abuses relating to the use of offshore accounts by US taxpayers.
Generally speaking, the FATCA provisions will implement a new 30 percent withholding tax on all “withholdable payments” to a “foreign financial institution” (FFI) once the legislation is fully phased in on January 1, 2015, unless certain requirements are met.
See the attached article for more information.