Belgium is planning to sign an intergovernmental agreement (IGA) with US in Brussels on 23 April to implement the US Foreign Account Tax Compliance Act (FATCA).
The new IGA will enable automatic exchange of bank data from accounts held by US taxpayers in both countries.
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Under the new agreement, failure by an FFI to sign an agreement with the US Internal Revenue Service (IRS) and disclose information would result in a requirement to withhold 30% tax on US-source income.
Belgian finance minister Koen Geens said that the IGA will enhance enforcement of international tax obligations and will prevent the imposition of a withholding tax.
The IGA is scheduled to come into effect from September 2015.
The FATCA law has been introduced to tackle tax evasion by Americans with foreign bank accounts. FATCA, which was enforced by Congress in 2010, requires information reporting and withholding tax provisions that target non-compliance by US taxpayers using foreign accounts.
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By GlobalData
