Russian parliament has approved a bill that enables financial institutions to comply with the United States’s Foreign Account Tax Compliance Act (FATCA).
The bill allows the banks to share information about their foreign clients with overseas tax officials.
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Following the move, the bill will now pass from the upper house of parliament to president Vladimir Putin to transform it into a law.
The US is set to introduce Foreign Account Tax Compliance Act of 2010 (FATCA) starting 1 July 2014, under which, overseas banks, investment funds and insurers are liable to provide IRS with information about Americans accounts with more than $50,000.
Till date, nearly 70 countries have registered with the US to comply with the FATCA law that targets Americans hiding assets overseas.
Under the law, Russian financial institutions (FFIs) will be required to report to the IRS information about financial accounts held by US taxpayers. Non-disclosure of information by an FFI will result in a requirement to hold back 30% tax on payments of US-sourced income.
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By GlobalDataRecently, Russian bank VTB Group said that it will stop service to its 2,000 clients in the US to comply with the requirements of the FATCA.
