This is part 4 of a 5-part series about what I see as the top International Business Law Trends in 2013.
The fourth international business law trend to watch out for in 2013 is the proliferation of international compliance initiatives.
A primary example is the United States’ Foreign Account Tax Compliance Act, or “FATCA.” FACTA promises to pose a host of challenges to international financial institutions.
FATCA will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
This new reporting regime applies with respect to payments made by foreign financial institutions to covered accounts on or after January 1, 2013.”
While the requirement that U.S. persons report their overseas investments on a new tax form is not controversial, the requirement that foreign financial institutions submit information about their clients’ accounts to the IRS is causing great difficulties for financial institutions across the world.FACTA is just one of many newly enacted international compliance measures that are sure to pose a host of new challenges for international business.
Trend to Watch: Look for a variety of new compliance measures to be instituted throughout the world in 2013.