A few months ago, no one had heard of the U.S. Foreign Account Tax Compliance Act (“FATCA”) outside of Washington DC. Last autumn, non U.S. market participants were incredulous when they learned that FATCA would, among other things, repeal the U.S. bearer bond rules and force many foreign banks to join the U.S. tax reporting system. In late March, however, the U.S. Congress passed the FATCA provisions and President Obama immediately signed them into law. These new provisions, which start to apply to some existing transactions on September 14, 2010, and which will become fully effective January 1, 2013, are likely to dramatically alter the way U.S. corporations raise funds abroad as well as the way many foreign investors invest in U.S. securities.
The panel will discuss:
The new FATCA 30% tax on “withholdable payments” such as interest, dividends and securities sales proceeds made to non-U.S. banks and brokers unless they agree to information report on their U.S. account holders beginning January 1, 2013
The new FATCA tax on “dividend equivalent” payments made on certain cross border swaps and other payments which takes effect September 14, 2010
The repeal of the U.S. “bearer bond” exception for obligations targeted to non-U.S. markets, effective for obligations issued after March 18, 2012
Ralph Cunningham, Managing Editor, International Tax Review (Host)
Thomas A. Humphreys, Partner, Morrison & Foerster LLP
New York CLE credit is pending.