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Foreign Accounts Tax compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn?

journal contribution
posted on 2023-05-17, 23:40 authored by Richard EcclestonRichard Eccleston, Gray, F
Promoting tax transparency to address international tax evasion is a central issue on the global policy agenda with G8 leaders recently declaring that ‘tax authorities across the world should automatically share information to fight the scourge of tax evasion’. This growing commitment to addressing international tax evasion has a long provenance. Recently, the little-known US Foreign Accounts Tax Compliance Act (FATCA), enacted in 2010, has played a key role in this effort/the international effort. The rapid evolution and diffusion of FATCA has the potential to make significant inroads into international tax evasion and has been lauded by proponents of improved offshore tax compliance. Yet FATCA is based on a ‘unilateral’ model, imposed by Washington on financial institutions operating in the US, which critics argue undermines its prospects of providing an effective basis for international tax cooperation and governance. This article provides an empirical account of the origins and evolution of FATCA, arguing that while FATCA is likely to increase the capacity of the US government to tax offshore holdings of its citizens, its ‘unilateral’ origins and design may limit reciprocity within the international tax regime. The article concludes with an assessment of the likely consequences of FATCA in terms of its impact on both international tax evasion and on global governance more broadly.

History

Publication title

Global Policy

Volume

5

Pagination

321-333

ISSN

1758-5880

Department/School

School of Social Sciences

Publisher

Wiley-Blackwell Publishing Ltd.

Place of publication

United Kingdom

Rights statement

Copyright 2014 University of Durham and John Wiley & Sons, Ltd.

Repository Status

  • Restricted

Socio-economic Objectives

International relations not elsewhere classified

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