Thursday, November 22, 2012

Mexico and US Sign Agreement to Exchange Banking and Financial Information Between Their Governments

On November 19, 2012, in Washington, the Mexican Undersecretary of Revenue, José Antonio González Anaya, and the United States Assistant Secretary for Tax Policy, Mark J. Mazur, signed a government-to-government agreement for the bilateral implementation of the Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted by Congress in March 2010 and is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers with foreign financial institutions (FFIs). Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

Once this goes into effect do not expect to keep your activities in Mexico secret from the US Government or the IRS. Best to surface now with the IRS  before your secret Mexican business, financial and investment activities are discovered through this program when the IRS will not be lenient and will most likely impose both criminal and high civil penalties for failure to properly report.

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