World Business News

A round up of the latest news for those doing business internationally

FATCA causes first Russian Bank to cut US Clients

Zone(s): Russia, USA ¦ Sector(s): Tax
[11 June 2014,]  By Tatiana Smolenska, Tax-, Moscow: With Russia unlikely to be able to conclude a Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States in the foreseeable future, and subject to the country’s current law on tax information exchange, VTB has become the first Russian bank to disclose that it is reducing its services to American clients.

FATCA, enacted by Congress in 2010 and taking effect on July 1, 2014, is intended to ensure that the US obtains information on accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.

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