Bankers from around the world told the Internal Revenue Service that proposed U.S. rules requiring reporting of Americans’ overseas bank accounts are too burdensome and must be changed.
Andrew Barkin, managing director and head of U.S. tax at Bank of Tokyo-Mitsubishi UFJ Ltd. told a Washington panel the rules need to be “streamlined and simplified significantly” so they can be understood by bank employees who do not speak English. Barkin spoke on behalf of the Institute of International Bankers at an IRS hearing yesterday in Washington.
The rules implement the Foreign Account Tax Compliance Act, a 2010 law designed to make it more difficult for U.S. citizens to hide money outside the country. Many provisions of the law take effect in 2013, and overseas banks will be required to tell the IRS annually about the balances and activity in their U.S. customers’ accounts.
Because of the law, some Asian banks have started turning away U.S. customers, and financial institutions from Japan, Switzerland, Australia and Brazil have lodged concerns with the U.S. Many argue that the U.S. is outsourcing its tax compliance to banks around the world and imposing rules that conflict with local laws and regulations.
Under the law, the U.S. will impose a 30 percent tax on some U.S.-related payments being sent to financial institutions outside the country that don’t comply with the rules.
Representatives of the Swiss Bankers Association, the Japanese Securities Dealers Association and the Financial Services Council of Australia spoke at yesterday’s hearing.
Courtesy of Bloomberg: Reported by Carla Main, Edited by Michael Hytha