The U.S. Treasury said on Thursday that it would collaborate with France to implement the Foreign Account Tax Compliance Act, which seeks to curb offshore tax evasion by facilitating the sharing of tax information.
The intergovernmental agreement signed with France on Thursday brings the total number of FATCA IGAs to 10, which also includes Denmark, Germany, Ireland, Mexico, Norway, Spain, the U.K., Japan and Switzerland.
“France has been an enthusiastic supporter of our effort to promote global tax transparency and critical to drafting a model of FATCA implementation,” Deputy Assistant Secretary for International Tax Affairs Robert B. Stack said. “This agreement demonstrates the growing global momentum behind FATCA and strong support from the world’s most important economies.”
France was one of the first nations to express support for FATCA’s goals. The signing was attended by French Finance Minister Pierre Moscovici and U.S. Ambassador to France Charles H. Rivkin.
FATCA requires American financial institutions to withhold a certain portion of payments to foreign financial institutions who have not agreed to identify and report tax information on U.S. accountholders.
FFIs can either enter into an agreement directly with the IRS or through one of two model IGAs signed by their home country. France will report tax information on U.S. accountholders directly to the French government, which will relay that information to the IRS. The IRS will reciprocate the effort.