July 18 2014

The US government has signed a Foreign Account Tax Compliance Agreement (FATCA) with almost 100 jurisdictions around the world. FATCA, which went into the effect on July 1, 2014, requires that all worldwide banking and financial institutions report US account holders with account balances of $10,000 or more to the United States Internal Revenue Service (IRS) in an effort to battle international tax evasion.  A full list of countries signed up for FATCA can be viewed here. To learn more about FATCA, view our previous blog Here.

Russia was in agreement talks with the US to sign an amended Intergovernmental Agreement (IGA). They signed the agreement just days before FATCA went into effect.

Interestingly, the expected reciprocity between the two countries did not happen.  Russian banks and financial institutions are required to report all US accounts holding $10,000 or more to the US, but the US does not have the same obligation to report Russian bank accounts in US banks to the Russian government.

In addition to PRC residents, the new Foreign Asset Reporting Requirements will also apply to the following groups:

PRC citizens who have been absent from the country for less than a year.
Non-residents who have had economic transactions within the PRC.
Corporations that are registered in the PRC
Branch offices of foreign institutions
Individuals who reside in the PRC for more than a year