Monday, 17 September 2012

U.S., U.K. sign FATCA pact

The WSJ blog reports that the U.K. is the first country to agree to implement the  tax-reporting requirements under FATCA:

Treasury said it expects to sign agreements with other countries in the near future, noting the U.K. deal is based on a model agreement developed in consultation not just with London but the governments of France, Germany, Italy and Spain. 
“We are pleased that the United Kingdom, one of our closest allies, is the first jurisdiction to sign a bilateral agreement with us and we look forward to quickly concluding agreements based on this model with other jurisdictions,” said Mark Mazur, assistant Treasury secretary for tax policy, in a statement. 
...While the U.K. agreement is reciprocal, allowing for the sharing of information on U.K. residents held in U.S. financial institutions, other deals may not allow for such exchanges.
It's not clear what's in it for the other country if an agreement does not provide for reciprocity; indeed, at least a superficial reciprocity is in general fundamental in the whole history of international tax agreements and I would like to know on what grounds a nonreciprocal agreement would even be contemplated.  Why would another country agree to share info with the U.S., to benefit the U.S. alone?  This is hardly a model for global tax cooperation, OECD praise notwithstanding.  Also each time I see another article about agreements on FATCA, regardless of the substantive content or likely efficacy thereof, the silence between the U.S. and Canada on this issue looms larger.

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