Zaher Fallahi, Esq., CPA; The US and Denmark sign a Foreign Account Tax Compliance Act agreement
On November 15, 2012, The US and Denmark signed an agreement to implement the Foreign Account Tax Compliance Act otherwise known as FATCA. Denmark is the second country after the Great Britain to sign such agreement. The Foreign Account Tax Compliance Act (FATCA) is an important development in U.S. efforts to improve tax compliance involving foreign financial assets and offshore accounts. Under FATCA, U.S. taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS. This reporting will be made on Form 8938, which taxpayers attach to their federal income tax return, starting this tax filing season. In addition, FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest. The US is in the process of negotiating such agreements with about 50 countries and territories.