The U.S. has signed an agreement with Switzerland to help implement a law cracking down on offshore tax evasion, the Treasury Department said Thursday.
Switzerland now becomes the eighth country to reach a pact with the U.S. on implementing the Foreign Account Tax Compliance Act (FATCA).
Neal Wolin, the acting Treasury secretary, said the latest agreement would help move the ball forward on battling tax evasion, and that he hoped there would be more similar bilateral deals in the future.
“Today’s announcement marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion,” Wolin said in a statement.
Treasury says it is currently in discussions with roughly 50 countries on offshore tax evasion, and has signed or initialed bilateral deals with eight separate countries.
The U.S. initialed an agreement with Italy in January. The department said in January, when it announced the final rules for FATCA that it had also reached a deal with Denmark, Ireland, Mexico, Norway, Spain and the United Kingdom.
Congress passed FATCA in 2010, after the White House expressed an interest in taking on offshore tax evasion. Before the bill’s passage, federal prosecutors had charged UBS, the Swiss banking titan, with helping American clients evade U.S. taxes. The bank later turned over client information to the IRS.
FATCA forces foreign banks to pay a 30 percent withholding fee on certain payments connected to the U.S. if they don’t share information with the IRS. Critics of the law have said it is an unfair burden on banks.
Source: The Hill