US and China could play ‘fiscal chicken’ under Fatca, expert warns

Angela Foyle at BDO
Angela Foyle, BDO

China's absence from a list of 50 countries negotiating intergovernmental agreements (IGAs) with the US Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (Fatca) could lead to a standoff between the two states once withholding starts, a legal expert has warned. This month the IRS released a list of 50 countries that are on the road to signing an IGA – either finalising models for IGAs, engaged in dialogue for pursuing an IGA or conducting initial negotiations.