Germany Brings FATCA Law Into Force
Germany’s Ministry of Finance announced that a law enabling the implementation of the United States’ Foreign Account Tax Compliance Act (FATCA) has come into force.
The ministry said that the FATCA-USA Implementation Regulation, known in German as FATCA-USA-Umsetzungsverordnung or FATCA-USA-UmsV, entered into force on July 23, 2014.
Germany signed the FATCA agreement with the US on May 31, 2013, and the agreement came into effect on December 11, 2013.
The agreement is a type 1A Inter-Governmental agreement under which German financial institutions report relevant data to their Government, which then exchanges it reciprocally with the USA.
Enacted by the US Congress in 2010, and effective from July 1, 2014, FATCA is intended to ensure that US authorities obtain information on accounts provided by foreign financial institutions (FFIs) to US persons. Failure by an FFI to disclose information about their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.