Moldova, USA sign agreement on tax transparency

Chisinau, 27 November /MOLDPRES/ - The USA and Moldova on 26 November signed an inter-governmental agreement on implementation of provisions of the Foreign Account Tax Compliance Act (FATCA), in order to promote tax transparency in both countries.  The document emphasises the growing international cooperation, in order to stop tax evasion and is aimed at fighting the off-shore tax evasion.

”The signing of this agreement is an important step forward in the cooperation between our states, in order to combat tax evasion. When tax payers from abroad avoid paying what they owe, the other tax payers must cover a disproportional part of the tax liability. The FATCA intergovernmental accord is an important part of the U.S. Government's effort to approach this problem,” American Ambassador to Moldova William H. Moser said.

In the international tax approach, FATCA has become a standard at global level in terms of measures to fight against tax evasion. Thus, more countries concluded such agreements, the Finance Ministry specifies.

The above-mentioned document, signed by Moldova and USA, stipulates that the financial institutions from the banking and non-banking financial sector, under the FATCA provisions, are to provide the U.S. Bureau of the Fiscal Service with reports on accounts held by American taxpayers or by foreign entities with shareholders mainly made up by American taxpayers. Otherwise, the respective institutions will have to write off 30 per cent of all payments from the USA to the FATCA non-participant institutions and to account holders refusing to unveil necessary data.

The signing of this agreement will lead to improving the cooperation ties between the sides, as well as Moldova’s alignment to the FATCA international standard.

In March 2010, the American Congress adopted the Foreign Account Tax Compliance Act, which provides for an essential change of the rules on taxation of financial means held by people – American citizens in the accounts of foreign financial institutions from the banking and non-banking financial sector.