With India signing the U.S. tax compliance law, many people are wondering what’s next for FATCA. On July 9, Indian revenue secretary Shaktikanta Das and U.S. Ambassador Richard Verma signed the Foreign Account Tax Compliance Act or FATCA, which was created to fight tax evasion by U.S. citizens.
As experienced FATCA consultants in Tysons, VA and serving clients in the Metro DC area, nationally and worldwide, we see this as another leap in promoting transparency among countries on tax matters.
India on Board
According to Das, the pact signed by both countries is a very important step for India to deal with offshore tax evasion and avoidance issues. The signing of an intergovernmental agreement only strengthens the long-standing relationship of the United States and India. Additionally, the treaty only reassures the commitment of the government of India to defeat the nuisance of black money. Under FATCA, the U.S. government can share records on offshore accounts and assets with other countries.
India anticipates receiving information through an automatic exchange of information portal later this year. This practical exchange of information endeavors to discourage tax offenders and bring greater justice to the tax regime, in order to establish a strong economy for the involved parties. Financial sectors will be publishing a more detailed guidance on FATCA—one that includes penalty taxes upon noncompliance and other conditions.
Benefits of FATCA
FATCA is turning into a global standard for curtailing attempts on tax evasion for foreign accounts and assets. As mentioned earlier, the main goal of FATCA is to establish global tax transparency. It necessitates financial institutions and foreign banks to detail the accounts of U.S. taxpayers. It also requires U.S. banks to report and deny taxes from payments to foreign recipients. This improved data sharing has thwarted the efforts of individuals who don’t willfully report their assets.
The good news is, foreign account holders are entitled to tax exclusions and deductions through various provisions. For U.S. citizens who live and work outside of the U.S., you can claim foreign-earned income exclusions and foreign housing exclusion and deduction. If you are not familiar with the process, you can always ask your local tax experts. US International Tax Advisors is here to help you manage any issues concerning international tax compliance for taxpayers in Baltimore, MD and surrounding areas.
We help individuals and companies alike to identify their legal options and provide effective solutions. There will come a time when more countries will appreciate the benefits of FATCA. Deal with your offshore accounts today. Call us at (844) 796-8565 and we’ll be ready to assist you.