Meaning
This U.S. law combats tax evasion by citizens holding overseas financial assets.Definition
FATCA, the Foreign Account Tax Compliance Act, is a U.S. federal law. It requires foreign financial institutions (FFIs) to report U.S. persons’ financial accounts to the IRS.Purpose
Its goal is to prevent U.S. taxpayers from evading taxes using offshore accounts, ensuring tax compliance.Key Provisions
FFIs must identify and report U.S. accounts. Non-compliant institutions face a 30% withholding tax on U.S. source payments.Author
