Fight against international tax evasion
François Baroin, Minister for the Economy, Finance and Industry, and Valérie Pécresse, Minister for the Budget, Public Accounts and Administrative Reform and Government Spokesman, welcome the agreement between five European countries and the United States to introduce an unprecedented multilateral automatic tax information exchange system.
In 2010, the United States adopted what is commonly known as FATCA [Foreign Account Tax Compliance Act], whose objective France shares: to fight international tax evasion by means of a more comprehensive collection of information than in the past.
Yet the initial FATCA system – which involved our financial institutions carrying out a very complicated information search and reporting directly to the American tax authorities – encountered considerable legal, practical and financial obstacles. Moreover this system, conceived unilaterally, did not foresee that the exchange of information might also benefit the United States’ partners.
So France, along with Germany, Italy, Spain and the United Kingdom, has begun discussions with the United States to look at how FATCA could be adjusted, by better proportioning the banks’ investigations, seeking alternative methods of applying sanctions to those envisaged at the start and re-examining methods for reporting information. The American government has just provided important details in guidance it issued today.
Beyond this, France and her European partners have agreed to explore with the United States the possibility of using regular channels for exchanging information between [tax] authorities. This is the subject of a joint statement.
This statement lays down the framework which could be a landmark on the way to a widespread automatic exchange of tax information, which France is supporting.
This agreement is a further success in the policy to fight international tax fraud and avoidance, in which, since 2007, France has played a predominant role./.