On November 13, 2014, Hong Kong and the United States signed an inter-governmental agreement (IGA), which will require financial institutions in Hong Kong to comply with the US Foreign Account Tax Compliance Act (FATCA).
FATCA provides the Internal Revenue Service (IRS) with the tools it needs (not a scalpel but a chainsaw) to obtain information on financial accounts held at foreign financial institutions (FFIs) by US persons. An FFI’s failure to disclose information on their US clients hits it where it hurts the most: in their wallets. Very simply, it results in the withholding of 30 percent tax on payments of US-sourced income.
Model IGAs are creatures of the US Treasury and have been developed to overcome a Read more