Asset managers continue to be challenged by the “lack of consistency” and “uncertainty” around the Foreign Account Tax Compliance Act (FATCA) in the United States.
A Northern Trust survey of fund managers still shows that the majority (51%) consider “lack of consistency” and “uncertainty” a major challenge.
“Although the implementation deadlines have been extended, many of the same concerns are still shared,” says Kathleen Dugan, FATCA product manager with Northern Trust.
“Clients are already faced with meeting a multitude of regulatory requirements and feel challenged by the FATCA timelines and the daunting technological challenges presented. Additionally, the potential differences between the intergovernmental agreement rules and the regulations are causing concern.”
FATCA, which aims to prevent tax evasion by Americans who use non-U.S. vehicles such as offshore accounts to avoid their tax obligations, was originally enacted in March 2010 with plans to generally come into effect in January 2013 for U.S. financial institutions and July 2013 for foreign financial institutions.
However, recognizing the complexities of the rules and the delays in publication of certain key guidance, the Internal Revenue Service and Treasury Department postponed the general implementation date until January 2014.
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