U.S. IRS relaxes requirements for FATCA.
FATCA, scheduled to take effect on Jan. 1, 2013, requires foreign financial institutions to report directly to IRS information about financial accounts held by U.S. tax payers (including U.S. citizens, green-card holders, and long residents in the U.S.) or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest. Those failing to comply will face a 30% withholding penalty for their U.S. source incomes.
The requirement will inflict a major impact on the operation of financial institutions and in response to their backfire, the IRS greatly relax the thresholds for account reporting, so as to alleviate their burden.
The threshold requiring financial institutions to collect information on clients' assets, for instance, has been raised to US$1 million, from US$500,000 originally. The reporting threshold for corporate accounts has been set at US$250,000, a stipulation which can greatly reduce the trouble for small and medium enterprises.
Foreign institutions with deposits scale less than US$175 million will be exempt from the requirement.
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|Title Annotation:||Foreign Account Tax Compliance Act|
|Publication:||The Taiwan Economic News|
|Article Type:||Brief article|
|Date:||Feb 10, 2012|
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