Despite the act generating a similar level of controversy to the very tax avoidance it intends to neutralise, all foreign financial institutions (FFIs) will now have to disclose US related information about new and existing clients to the US Internal Revenue Service (IRS), or risk facing a 30% withholding tax.
In preparation for the act, which was passed by Barack Obama in 2010, many countries have signed intergovernmental agreements (IGAs) with the IRS, which offer relaxed deadlines and an increased clarity and simplicity around due diligence with country specific exemptions.
