US hunts American tax defaulters in India

The US has said it is working on an inter-government engagement with India and other countries to check non-compliance by American taxpayers using foreign bank accounts in their jurisdictions.

Through these engagements with more than 50 countries, the US is looking to implement information reporting and withholding tax provisions, commonly known as the Foreign Account Tax Compliance Act (FATCA).

Enacted in 2010, FATCA aims at checking non-compliance by US taxpayers using foreign accounts. It requires foreign financial institutions to report to the US tax department information about accounts held by US taxpayers, or by foreign entities in which they hold a substantial ownership interest.

Concerns have been raised in the past by various foreign banks and other financial institutions about the FATCA provisions, as it is feared that they might lead to increased compliance costs and might infringe upon the local financial secrecy laws of the jurisdictions concerned.

An agreement with India will allow the US tax department to seek information from the financial institutions operating in that country about their clients who are liable to pay tax in the US.

In a statement, the US Treasury Department said last night it has engaged with more than 50 countries and jurisdictions around the world to improve international tax compliance and to implement FATCA provisions.

"The jurisdictions with which Treasury is working to explore options for inter-governmental engagement include Bermuda, Brazil, the British Virgin Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg, Romania, Russia, Seychelles, Sint Maarten, Slovenia, and South Africa," it said.

The US Treasury has already concluded pacts with the UK.

The jurisdictions with which it is in process of finalising an agreement or it hopes to conclude negotiations by year-end include: France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Guernsey, Ireland, Isle of Man, Jersey, Mexico, the Netherlands, and Norway.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on indianexpress.com are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, indianexpress.com reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.