Global Version of FATCA

The United States is not the only country interested in pursuing foreign tax compliance involving overseas bank accounts, financial accounts and other income generating assets. Although FATCA (Foreign Account Tax Compliance Act) is a U.S. law, and the U.S. has entered into FATCA agreements with over 100 countries, there is another law on the horizon called CRS (Common Reporting Standard) or GATCA (Global Account Tax Compliance Act).

CRS is generally considered the global version of FATCA that allows countries to exchange tax data related to offshore investments on their own citizens. The reason why international tax law compliance has taken center stage is because under the new FATCA laws and CRS/GATCA rules, foreign countries are actively reporting the bank and financial accounts of U.S. citizens and U.S. green card holders’ foreign assets. If a foreign country is interested in working with the U.S., the foreign country will enter into an “Intergovernmental Agreement” (IGA) and these agreements are mostly reciprocity agreements, which means not only will the foreign country report the information to the IRS, but the IRS will also reciprocate by providing the same information to foreign country tax authority. 

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