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Shhh: Bank Secrecy & Tax Havens

Shhh: Bank Secrecy & Tax Havens. Matt Carew. What’s the problem? Why do we care?. An estimated hundreds of millions of “lost” tax revenue each year in the US alone A legal veil of secrecy for the nefarious. US Legislation. FACTA, the Foreign Account Tax Compliance Act

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Shhh: Bank Secrecy & Tax Havens

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  1. Shhh: Bank Secrecy & Tax Havens Matt Carew

  2. What’s the problem?Why do we care? • An estimated hundreds of millions of “lost” tax revenue each year in the US alone • A legal veil of secrecy for the nefarious

  3. US Legislation • FACTA, the Foreign Account Tax Compliance Act • Title V of the 2010 “Hiring Incentives to Restore Employment” (HIRE) Act, also Chapter 4 of the US Internal Revenue Code • Requires US taxpayers who have deposit accounts at foreign financial institutions, foreign stocks, foreign partnership interests, foreign mutual funds, foreign hedge funds, etc. to declare said accounts • Requires foreign financial institutions who sell US backed securities to pay percentage of sales price • Also (and more importantly from an international perspective), requires foreign financial institutions to provide information to the IRS for all accounts held by US citizens • Signed FACTA agreements with Switzerland, Ireland, Mexico, Denmark, and the UK

  4. My focus • Effectiveness of a US law applied abroad? • Countries who agreed: Switzerland, Ireland • Countries who have not agreed: Malta, Cayman Islands • How to assure more complete cooperation and compliance?

  5. Sources • http://www.dlapiper.com/files/Uploads/Documents/FATCA-Alert.pdf - Analysis of the law by DLA Piper • http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx - US Dept. of Treasure Resource Center on FACTA • http://www.oecd.org/ctp/fightingtaxevasion.htm - OECD page re Fighting Tax Evasion • http://www.gpo.gov/fdsys/pkg/PLAW-111publ147/pdf/PLAW-111publ147.pdf - Actual text of FACTA/HIRE • http://www.economist.com/news/finance-and-economics/21576146-tax-havens-start-reassess-their-business-models-leaky-devils - Economist article on tax havens • http://www.icij.org/offshore - International Consortium of International Journalists

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