Taiwan is scheduled to sign a tax pact with the United States by the end of June. That’s the word from the Financial Supervisory Commission (FSC) on Friday.
In April, the FSC and Minister of Finance jointly announced that the government had reached an agreement in principle with the U.S. about the Foreign Account Tax Compliance Act (FATCA). The act was established to combat offshore tax evasion. It requires American citizens to report their financial assets held outside the country. It also requires foreign financial institutions to report to the IRS on their American clients.
Under the act, people with U.S. citizenship, green cards or those who have worked in the U.S. for more than 183 days annually over the past three years will have to report all of their overseas assets held in 2013 when they file their tax returns in 2014.
Because of these controversial requirements, a number of Taiwan residents with dual nationalities have been thinking about renouncing their American citizenship to avoid taxes under the FATCA.