Squire Sanders partner Andreas Fillmann authored the article “FATCA – ein Gesetz, das viele Fragen aufwirft,” published in the February 2012 edition of Alternative News. Andreas discusses the Foreign Account Tax Compliance Act (FATCA), which was enacted in March 2010 as part (Title V) of another, almost entirely unrelated, piece of legislation – a jobs bill called the Hiring Incentives to Restore Employment (HIRE) Act. It was signed into law by President Obama on March 18, 2010 as Public Law 111-147 with the purpose of financing a labor incentive program by countering offshore tax evasion. The law therefore applies in particular to all "foreign financial institutions" (FFIs), defined to include non-US banks, all kind of funds, securitization vehicles and others. The principal effect of FATCA is that an FFI will be subject to a 30-percent withholding on all US-source income including interest, principal, dividends and sale proceeds, unless the FFI signs an agreement with the Internal Revenue Service (IRS) accepting complex reporting obligations in relation to direct and indirect US account-holders.
“FATCA – ein Gesetz, das viele Fragen aufwirft,” Alternative News, February 2012, is reprinted with permission from the publisher.