Analysing the effects of FATCA for the implementation of the Global Standard for the exchange of tax information

Abstract

The main aim of this research was to analyse the effects of FATCA on financial institutions and the way the Global Standard for the Exchange of Automatic Tax Information can build on the foundations that were laid down by FATCA, to reach the ultimate goal of having a global system that combats tax evasion. To reach the objectives of this study the main technical aspects of both FATCA and the Global Standard were analysed and compared to study the impact that such technicalities could have on financial institutions. Moreover, various interviews were conducted with individuals from various sectors to obtain their opinions regarding FATCA and the Global Standard. This study concluded that despite the fact that FATCA added compliance burdens on financial institutions, it has been very effective in raising global awareness regarding tax evasion. Moreover, it showed that an international effort to fight tax evasion is possible and this has led to the setting up of the Global Standard. Finally, this research concluded that for the Global Standard to be effective, it should be in line with the implementation procedures that were used by FATCA.