Foreign companies baffled by US FATCA

Controversial new anti tax avoidance measures look set to get off to a chaotic start next week - as the US Internal Revenue Service requires many foreign businesses to register with it but has not explained what they need to do.

09 July 2013

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A week before the new online portal goes live on 15 July, the IRS has yet to tell the relevant businesses - foreign financial services organisations with UK clients - how they are meant to sign-up. Registering with the IRS is one of the requirements for these firms under the Foreign Tax Compliance Act (FATCA) of 2010. Hundreds of thousands of these organisations have until October 25 to register and they will have to give information to the IRS on any accounts they hold for US clients which are worth more than $50,000. Banks which fall foul of these rules could face a withholding tax of 30 per cent from 1 January.