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

Citations Over TimeTop 10% of 2014 papers

Abstract

Abstract 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.

Related Papers

• On Legislation against Tax Avoidance(2008)
• Tax Avoidance, Tax Evasion, and Tax Fairness – the Meaning of 'Fair Share' in International Corporate Income Taxation(2015)
• → Countering unacceptable tax avoidance through general anti-avoidance rule in EU tax law(2021)
• → European Anti-Tax-Avoidance Regimes(2023)
• Tax Avoidance, Tax Evasion, and Tax Fairness – the Meaning of 'Fair Share' in International Corporate Income Taxation(2015)