Thursday, November 14, 2013

US and France Agree to Co-Operate on Tax Evasion

The Treasury has announced that the United States has signed an intergovernmental agreement with France to implement the Foreign Account Tax Compliance Act   Enacted in 2010, FATCA aims to curtail offshore tax evasion by facilitating the exchange of tax information.

“France has been an enthusiastic supporter of our effort to promote global tax transparency and critical to drafting a model of FATCA implementation,” said Deputy Assistant Secretary for International Tax Affairs Robert B. Stack.  “This agreement demonstrates the growing global momentum behind FATCA and strong support from the world’s most important economies.”

The agreement was signed today by U.S. Ambassador to France Charles H. Rivkin and French Finance Minister Pierre Moscovici.

“The signing of this agreement marks an important step forward in the collaboration between the United States and France to combat tax evasion,” said Ambassador Rivkin.

FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries.  It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on U.S. account holders.  The IGA between the United States and France is the Model 1A version, meaning that FFIs in France will be required to report tax information about U.S. account holders directly to the French government, which will in turn relay that information to the IRS.  The IRS will reciprocate with similar information about French account holders.


  1. I'm disappointed. They couldn't come up with a title for the act that allowed them the satisfying acronym FATCAT? Maybe the Foreign Account Tax Compliance Act of Thoroughness?

    Why is Robert Stack involved? Was this an unsolved mystery? If he's still alive, maybe he can voice Ultra Magnus again in one of those horrible Michael Bay Transformer movies.

  2. Isn't "an intergovernmental agreement" called "a Treaty"? And the Senate votes on this when?

  3. what a surprise, the 2 most evil "democratic" governments on the planet today cooperating together.

  4. FATCA is a horrible piece of extraterritorial legislation that requires every financial institution IN THE WORLD to trawl through their accounts and report on every US 'person' (including green card holders, spouses of US citizens, children of US citizens, etc) who might just have an account there. This includes the 7 million US expats who are now finding that they are unable to get bank accounts or mortgages because foreign banks are shutting the door on US citizens in order to escape FATCA.
    Also, all of these IGA agreements that Treasury are making are promising 'reciprocity' - that the US will also turn over the names/account details of non-US account holders to other countries. This will never happen. The US is one the biggest tax havens in the world and the US financial system will never allow legislation to pass that would force US banks to comply.
    So FATCA is a unilateral, extrataritorial piece of legislation that is forcing foreign governments and institutions to start looking at new ways to cut the US out of the worldwide financial market completely.
    Great job USA!
    P.S. Anyone with any significant wealth is already finding ways around FATCA. FATCA will only hurt those who have no wealth.