U.S. Ambassador to Moldova William H. Moser and Minister of Finance Anatol Arapu signed an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency between the two nations on tax matters. This agreement underscores growing international cooperation to end tax evasion everywhere, IPN reports, quoting a press release of the U.S. Embassy.
“When taxpayers overseas avoid paying what they owe, other taxpayers have to bear a disproportionate share of the tax burden. The FATCA intergovernmental agreement is an important part of the U.S. government’s effort to address that issue,” said Ambassador Moser.
FATCA is rapidly becoming the global standard in the effort to curtail offshore tax evasion. To date, the United States has signed 47 FATCA intergovernmental agreements, has 54 agreements in substance, and is engaged in related discussions with many other jurisdictions.
The United States enacted FATCA in 2010 to combat offshore tax evasion by encouraging transparency and obtaining information on accounts held by U.S. taxpayers in other countries. FATCA calls for foreign financial institutions to provide annually, either directly or indirectly through their governments, the U.S. Internal Revenue Service (IRS) with account information about U.S. account holders or else a 30 percent withholding tax will be imposed on certain U.S. source payments, such as interest.
The FATCA agreement between the United States and Moldova provides that financial institutions in Moldova will report information about U.S. account holders directly to the IRS.
