Clients of British and Irish banks, and other financial institutions, could face increased charges after the UK and Irish governments signed controversial intergovernmental agreements (IGAs) with the US to report directly to America’s tax authority, the Internal Revenue Service (IRS), warns the boss of independent financial advisory organisation deVere Group
The UK and Ireland are among the countries which have already accepted an IGA with America in order to be compliant with the Obama administration’s Foreign Account Tax Compliance Act (FATCA). FATCA will require all foreign financial institutions to declare the activities of all their American clients to the IRS.
Nigel Green, chief executive of deVere Group, said: “The costs of becoming FATCA-compliant for banks, and other financial institutions, in countries where an IGA has been agreed will be astronomical.
“In these challenging economic times, when some banks have even had to be rescued from collapse using
taxpayers’ money, many financial institutions can ill-afford these costs and they will, in all probability, be passed on to their clients.
“Essentially, banks, and in turn their clients, will be paying for the privilege of becoming defacto snooping agents for the US Treasury.
“Moreover, under the IGAs, the British and Irish revenue services would assume responsibility for domestic administration of FATCA, shifting those costs from the IRS to UK and Irish taxpayers, respectively.”
dailyalternative | alternative news – New tax liability warning