WASHINGTON, (Reuters) – The U.S. Treasury Department yesterday gave foreign financial institutions 10 extra days to register with the U.S. government, under a new law to combat offshore tax dodging by Americans that goes into effect on July 1.
Under the Foreign Account Tax Compliance Act (FATCA), foreign banks, insurers and investment funds must send the Internal Revenue Service information about Americans’ and U.S. permanent residents’ offshore accounts worth more than $50,000.
Institutions that fail to comply could effectively be frozen out of U.S. markets.
In addition to extending registration to May 5 from April 25, the Treasury Department said more countries are now FATCA compliant, alleviating worries for financial firms in Brazil, South Korea and South Africa, among other countries.
