China is set to comply with the US Foreign Account Tax Compliance Act (FATCA) rules by July 2013, following backlash from mainland authorities.

Speaking at the International Transfer Agency Summit in Hong Kong, FATCA Asia-Pacific leader at consultancy Deloitte Jim Calvin was quoted by AsianInvestor as saying that by the time the far-reaching rules come into effect in July, China will be on board.

According to the FATCA rules, entities including banks and fund managers in every jurisdiction should disclose financial information about all their American account holders.

Calvin told the website that China may adopt the model 1 intergovernmental agreement (IGA), where the firms first report to local authorities who transfer the information to the US Internal Revenue Service, instead of model 2 IGA, where the non-US financial institutions must report directly to the IRS.

"I worked with [China’s State Administration of Taxation] and advised them on model 1," Calvin added.