U.S. gives foreign banks one year to supply information on U.S. citizens

July 12, 2013 (AFP) – The United States on Friday put off until mid-2014 the deadline for foreign banks to agree to supply information on the accounts of US citizens, part of the effort to battle tax evasion.

The US Treasury said that “due to overwhelming interest from countries around the world,” it would extend the deadline for compliance with the US Foreign Account Tax Compliance Act (FATCA) by six months to July 1, 2014.

On that date foreign banks and other financial institutions will have to have agreed to identify and report information on US account holders, or the Treasury will require US financial institutions to hold back 30 percent of dividend and interest payments due to them.

But the deadline for the first full reporting of the accounts remains 2015, when the foreign banks will have to supply data on accounts held by Americans during the previous year.

The Treasury said it was working with more than 80 countries and jurisdictions to begin exchanging data on the offshore accounts of their respective foreign nationals, amid a global effort to police tax evasion.

“The high volume of international participation in this effort represents a quintessential race to the top,” said Robert Stack, the Treasury’s deputy assistant secretary for international tax affairs.

“Every additional country we bring on board means we are one step closer to winning the fight against offshore tax evasion,” he said in a statement.

The Treasury said it had signed nine agreements with other governments to facilitate the automatic exchange of information required by FATCA.