What is GATCA? Many clients want to know how are Southern and Central American countries such as Costa Rica handling offshore tax reporting and the global sharing of private taxpayer financial data? How is the continuing trend affect US investors, taxpayers and the foreign nationals who live and work in the United States?
GATCA is a popular adaptation of the US law known as FATCA or the Foreign Account Tax Compliance Act. The “G” in GATCA stands for “Global” and refers to the growing trend of new tax laws across the new world that relate to the reporting of offshore bank accounts, assets and income as well as the sharing of detailed financial information on specific individuals between sovereign nations and their tax agencies.
Costa Rica is a strong example. Costa Rica adopted FATCA agreements with the US fairly early on in the process and has mutually agreed to share information regarding US taxpayers with accounts in Costa Rican banks, as well as data regarding US expats that reside in Costa Rica. Costa Rica has also developed information sharing agreements with Canada, Mexico, Argentina, Germany, Italy, Finland, Sweden, the Netherlands, France the Bermudas and now Panama.
Last week, Panama signed the Convention on Mutual Administrative Assistance in Tax Matters (MAC) in Paris. The MAC is the new global standard which establishes a legal template and framework for the implementation of financial transparency and international cooperation initiatives. To date, Panama makes brings the total number of countries who have signed the MAC legal offshore tax and financial transparency agreement to 105.
Where do you have foreign bank accounts? How are other countries such as Costa Rica handling offshore tax reporting and what does this bode for the future? The international tax attorneys at Allen Barron are uniquely positioned to guide you through the complex issues that face US taxpayers with offshore bank accounts, assets, investments, foreign corporate ownership and income. We invite you to contact us at 866-631-3470 for a free consultation, and to discuss the implications of global transparent information sharing and the growing risks for those who fail to make a voluntary disclosure to the IRS.