Russia and the United States have agreed upon a draft law on bilateral interaction to execute provisions of the Foreign Account Tax Compliance Act (FATCA), Ilya Trunin, head of the Finance Ministry’s Department of Fiscal and Customs Tariff Policy, told journalists.
FATCA, which will take effect for Russia as of July 1, 2014, is designed to cut fiscal losses of the United States because of offshore areas that Americans use not to pay taxes. The law demands foreign banks to provide info on accounts held by American clients to the US Internal Revenue Service.
“We discussed the model of a treaty that is called the mutual exchange of information. Under this treaty if Russian banks are obliged through the Federal Tax Service (FTS) to provide fiscal data to the US authorities about American tax residents and their accounts, so the Americans will also take obligations to provide Russia with data on Russian accounts held in the US and about parameters of these accounts," the official said.
The document, according to Trunin, was agreed upon and the Russian government will decide whether or not to sign it.
If this happens, Russian banks won’t have to submit information to the US fiscal bodies individually as the Federal Tax Service (FTS) will be charge of this.
“If we decide not to enter into it and banks get no registration number by July 1 and remain outside FATCA, sanctions will be applied to them subsequently," Trunin said.
