Beyond FATCA: An Evolutionary Moment for the International Tax System

Grinberg, Itai

doi:10.2139/ssrn.1996752

Cited by 16 publications

(16 citation statements)

References 9 publications

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“…However, there is cause for optimism given the broad-based political support and the pace of recent developments. Thus, there is reason to believe that the international community can successfully address FAT-CA's deficiencies and 'can catch up to create an appropriate framework' for the automatic exchange of tax and financial data (Grinberg, 2012;Gilleard, 2013, p. 24).…”

Section: Discussionmentioning

confidence: 99%

Foreign Accounts Tax Compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn?

Eccleston

Gray

2014

Global Policy

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Promoting tax transparency to address international tax evasion is a central issue on the global policy agenda with G8 leaders recently declaring that 'tax authorities across the world should automatically share information to fight the scourge of tax evasion'. This growing commitment to addressing international tax evasion has a long provenance. Recently, the little-known US Foreign Accounts Tax Compliance Act (FATCA), enacted in 2010, has played a key role in this effort/the international effort. The rapid evolution and diffusion of FATCA has the potential to make significant inroads into international tax evasion and has been lauded by proponents of improved offshore tax compliance. Yet FATCA is based on a 'unilateral' model, imposed by Washington on financial institutions operating in the US, which critics argue undermines its prospects of providing an effective basis for international tax cooperation and governance. This article provides an empirical account of the origins and evolution of FATCA, arguing that while FATCA is likely to increase the capacity of the US government to tax offshore holdings of its citizens, its 'unilateral' origins and design may limit reciprocity within the international tax regime. The article concludes with an assessment of the likely consequences of FATCA in terms of its impact on both international tax evasion and on global governance more broadly. Policy Implications• The Organisation for Economic Cooperation and Development (OECD) claims to have presided over a 'tax transparency revolution' since 2009. However, critics argue that the information exchange standard that the OECD has promoted -which only requires tax authorities to exchange tax information after being served with a detailed request -is ineffective and 'a wasted opportunity'.• Critics of the OECD argue that systemic, automatic information exchange is the only effective way to identify and address large-scale tax evasion.• In 2010, the US proposed its own FATCA standard -a more rigorous and potentially more effective standard for the automatic exchange of tax information.• The FATCA regime is likely to have a number of significant yet potentially contradictory consequences. On one hand, it has added weight to the case for adopting automatic tax information exchange as the new international standard. However, it may undermine important multilateral initiatives such as the OECD Global Forum.In the aftermath of the Financial Crisis, so-called offshore tax havens and how best to combat international tax evasion have received unprecedented political attention. Promoting tax transparency and restricting harmful tax competition was a peripheral global policy issue for decades. However, amid the ongoing public debt crises and associated austerity that have engulfed much of the developed world since 2008, this policy area is now a prominent issue on the international agenda. Yet despite recent attention, the most appropriate strategies for addressing international tax evasion and their ultimate effectiveness remain contes...

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Section: Discussionmentioning

confidence: 99%

Foreign Accounts Tax Compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn?

Eccleston

Gray

2014

Global Policy

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“…In parallel, the OECD published a list of incompliant countries that for the first time also included some of its own members. In response, targeted jurisdictions like Switzerland, Liechtenstein, San Marino, Monaco, and Andorra, eventually adopted OECD standards for exchange of information upon request (Grinberg 2012), making fulfillment of the most important condition for an end to the transition period specified in article 10 of the Savings Tax Directive more likely. Meanwhile, the OECD also amended the Convention on Mutual Administrative Assistance in Tax Matters, turning it into a 'full-fledged vehicle for automatic information exchange' (Grinberg 2012: 54).…”

Section: Current Revisionmentioning

confidence: 99%

“…6). Austria and Luxembourg are thus committing to inform home countries about a significant part of the capital gains non-resident EU nationals earn under their jurisdiction, enabling EU partners to tax their residents' foreign interest income at their respective domestic rates (Grinberg 2012). As a result, EU residents will no longer be able to evade taxes on interest by moving principal to either Luxembourg or Austria once the revised directive enters into force.…”

Section: Introductionmentioning

confidence: 99%

“…They achieved this via the Foreign Account Tax Compliance Act (FATCA) passed by Congress in 2010 and entering into force on 1 July 2014. FATCA obliges foreign financial institutions (FFI) to provide U.S. tax authorities with information on U.S. residents' account balances and capital income, or be subject to a 30% withholding tax on payments from U.S. sources (Grinberg 2012). The act impacted Luxembourg and Austria's position via two channels.…”

Section: Introductionmentioning

confidence: 99%

“…Unlike AEOI, exchange of information upon request presupposes a reasonable suspicion of tax evasion on the part of the residence country. This requires data that tax authorities either do not have or can only acquire through the purchase of stolen data (Grinberg 2012).…”

mentioning

confidence: 99%

See 2 more Smart Citations

The Power Politics of International Tax Cooperation. Why Luxembourg and Austria Accepted Automatic Exchange of Information on Foreign Account Holders' Interest Income

Hakelberg

2014

SSRN Journal

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The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Brigid Laffan since September 2013, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union.

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Automatic Exchange of Information

Kerzner¹,

Chodikoff²

2016

International Tax Evasion in the Global Information Age

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Beyond FATCA: An Evolutionary Moment for the International Tax System

Cited by 16 publications

References 9 publications

Foreign Accounts Tax Compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn?

Foreign Accounts Tax Compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn?

The Power Politics of International Tax Cooperation. Why Luxembourg and Austria Accepted Automatic Exchange of Information on Foreign Account Holders' Interest Income

Automatic Exchange of Information

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