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What is FATCA?

The FATCA is known as the Foreign Account Tax Compliance Act is a new law in the United States to prevent US taxpayers from evading US taxes.

The bill was enacted by the US Treasury (Ministry of Finance) and the US Internal Revenue Service (IRS) to prevent Americans from using banks and other financial institutions to evade US taxes on their income and assets, and to encourage them to be stricter for compliance with tax laws.

It is expected that most countries around the world will sign an Intergovernmental Agreement (IGA) with the US government for compliance with FATCA. These agreements will make the FATCA legislation part of the local laws of these countries.