The US Republican National Committee (RNC) on 24 January 2014 called for the repeal of the US FATCA law, siding with critics of the Obama administration statute.

Reuters said that at its Winter meeting in Washington, the RNC approved by voice vote a resolution in favour of abolishing the 2010 Foreign Account Tax Compliance Act (FATCA), set to take effect in July 2014, marking the party’s first explicit attack on the law.

FATCA will require most foreign banks and investment funds to report to the US Internal Revenue Service information about US customers’ accounts worth US$50,000 or more. Critics have blasted the law as an unfair government overreach and invasion of financial privacy. “The Republican National Committee … urges the US Congress to repeal FATCA,” said the measure, staking out a campaign position ahead of 2014’s mid-term elections. Many foreign financial institutions, including banks in Australia, have complained of what they say are excessive compliance costs with the FATCA regime.

[LTN 18, 29/1/14]

FATCA Guide released by Parliamentary Library

On 10 January 2014, the Federal Parliamentary Library released a research report – The Foreign Account Tax Compliance Act (FATCA) and interaction with G20 initiatives: a quick guide.

FATCA is an American law developed to reduce offshore tax evasion and regain US Federal tax revenues from American account holders at foreign (non-American) financial institutions internationally. It therefore has implications for Australia and its financial institutions. FATCA requires: (i) individuals to report their financial accounts held outside of the United States, and (ii) foreign (that is, non-US) financial institutions to report to the Internal Revenue Service (IRS) about their American clients.

To enforce the FATCA, it has become necessary for the US Government to sign agreements with foreign governments allowing the trade of individuals’ financial data. The research report says FATCA’s large scope and international presence has led to fears about the expanding reach of the US Treasury and IRS. The Australian Government is seeking to address concerns regarding the infringement of individuals’ data privacy rights and Australian taxation sovereignty prior to signing an Intergovernmental Agreement with the United States.

[LTN 8, 14/1/14]