Bulgaria is the most recent country to ink a deal with the United States to implement FATCA, the Foreign Account Tax Compliance Act. Passed by Congress in 2010, the law is designed to stomp out offshore tax evasion by targeting U.S. taxpayers with unreported offshore accounts.
Under the law, foreign banks and financial institutions must report accounts belonging to U.S. taxpayers to their local taxing authority. The local taxing authority, in turn, must turn this information over to the U.S. upon receipt of a “group request.” However, before this information can be exchanged, the local taxing authority must obtain the consent of those U.S. accountholders who are affected. This is usually accomplished through what’s called a “declaration of consent.” This is the essence of a Model 2 Treaty between the U.S. and Read More