Financial services specialist Altus has released research suggesting over three-quarters of Foreign Account Tax Compliance Act (FATCA) experts expect other countries to follow the US lead on globalised regulation within five years, while half believe it could happen within three years.
The data from Altus reflects issues highlighted in the BBC’s episode of ‘Panorama’ exposing tax avoidance from major corporates in the last five years. With billions of pounds potentially owing to the UK government, the issue of widespread adoption of ‘colonial’ tax regulations beyond the US may start to take hold, according to industry leaders. The main concern for financial services firms following the added financial and administrative burden of FATCA compliance is that governments within the EU may decide to adopt the same approach to tax evasion.
Altus director Kevin Okell said: “FATCA promises to be one of the most costly and burdensome of the new wave of regulations facing the financial services industry. The majority of respondents to our recent survey clearly believe FATCA is a forerunner of similar regulations in the next few years from other geographies. That suggests companies need to treat FATCA as more than just another compliance project and take a serious look at how their systems are architected to cope with this new style of regulatory challenge.”
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