Canada, Hungary join force with US to fight overseas tax evasion

The United States has signed intergovernmental agreements (IGA) with Canada and Hungary to clamp down on overseas tax evasion and promote taxation transparency, the U.S. Department of Treasury said on Wednesday. The Foreign Account Tax Compliance Act (FATCA) seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to foreign financial institutions that do not agree to identify and report information on U.S. account holders. "FATCA implementation is critical to combating international tax evasion and promoting transparency," said Deputy Assistant Secretary for International Tax Affairs Robert B. Stack. "The agreements announced today clearly demonstrate the considerable international support behind FATCA and we are proud to lead the global charge on this pressing issue," he added. U.S. Congress enacted FATCA in 2010 to target non-compliance by U.S. taxpayers using foreign accounts. The United States has signed 22 IGAs and has 12 agreements in substance to date. Since the Department of Treasury last announced multiple IGA signings in mid-December 2013, agreements have also been signed with Italy and Mauritius.