The Foreign Account Tax Compliance Act (FATCA) represents the United States efforts to combat tax evasion and abuse by US persons holding investments outside of the United States. The Act establishes a new set of tax information reporting and withholding procedures. While not expressly aimed at non-US persons, the regulations do impose withholding taxes on certain non-US entities that decline to disclose their US investors or account holders.
Under FATCA, US persons must report to the US tax authority, Internal Revenue Service (IRS), their assets held in offshore accounts. In addition, the regulations seek to require non-US financial institutions to report to the US tax authority certain information about financial accounts of US or US-owned investors and account holders.
For further information regarding FATCA, please visit the Interactive Brokers Knowledge Base.