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By Kerstin Thinnes (picture), Tax Partner and Amandine Horn, Tax manager, PwC Luxembourg
The Foreign Account Tax Compliance Act (FATCA) is a US tax law voted on 18 March 2010 which aims to fight tax evasion. FATCA will require Foreign Financial Institutions (FFIs) to enter into an agreement with the US tax authorities (IRS) to identify US accounts, to comply with due diligence procedures, and to report annually certain information to the IRS. It will impose a 30%-withholding tax notably on US source income paid to an FFI if they fail to comply with these requirements. The definition of an FFI includes among others investment funds.
On 8 February 2012 the IRS issued proposed regulations...
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