PwC Urges Banks to Brace for ‘FATCA Cliff’ as Deadlines Converge

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Financial institutions should brace for a “FATCA cliff” as they prepare to implement the Foreign Account Tax Compliance Act, PricewaterhouseCoopers LLP says in a news alert. Aimed at stopping tax evasion, the 2010 law requires foreign banks to tell the Internal Revenue Service about their U.S.-owned accounts or face, in some cases, a 30 percent withholding tax. With multiple deadlines converging on Jan. 1, 2014, PwC says, financial institutions should be engaging in “a higher degree of integrated planning and resource loading for 2013. FATCA due diligence, reporting, and withholding are now live within the same year.” These institutions should be monitoring and analyzing the impact of local law and intergovernmental information sharing agreements with regard to that withholding and reporting, PwC advises.