📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    What is the primary purpose of the Foreign Account Tax

    Compliance Act (FATCA)?
    A To monitor domestic transactions within the USA Correct Answer Incorrect Answer
    B To report financial accounts held by U.S. taxpayers in foreign institutions Correct Answer Incorrect Answer
    C To track only the income of U.S. citizens working abroad Correct Answer Incorrect Answer
    D To impose additional taxes on foreign financial institutions Correct Answer Incorrect Answer
    E To regulate financial markets in the USA Correct Answer Incorrect Answer

    Solution

    The Foreign Account Tax Compliance Act (FATCA) is a U.S. law that requires foreign financial institutions (FFIs) to report information about: • Financial accounts held by U.S. taxpayers, or • Foreign entities in which U.S. taxpayers have substantial ownership. The objective is to improve tax compliance and curb tax evasion through offshore accounts. FATCA operates through Inter-Governmental Agreements (IGAs) between the U.S. and other countries (such as India), which enable information sharing on financial assets held abroad. It does not aim to regulate U.S. markets or impose blanket taxes on FFIs but focuses strictly on international tax transparency and compliance.

    Practice Next
    More Accounts Questions

    Relevant for Exams:

    ask-question