Australia has commenced formal discussions for an intergovernmental agreement with the United States of America to minimise the impact for Australians of the United States’ Foreign Account Tax Compliance Act (FATCA) in Australia: Treasurer’s media release No 110 (7 November 2012).
FATCA was enacted by the United States Congress in March 2010 as part of US efforts to improve compliance with US tax laws. FATCA will impose certain due diligence and reporting obligations on foreign (non-US) financial institutions including Australian institutions.
A key objective of the proposed intergovernmental agreement is to facilitate Australian compliance with FATCA in a way that reduces its overall burden on Australian business.
An intergovernmental agreement would also improve existing reciprocal tax information sharing arrangements between the ATO and the United States Internal Revenue Service.