REFILE-UPDATE 2-U.S., Canada forge deal in global anti-tax dodger push

Wed Feb 5, 2014 6:53pm EST
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* Long-expected pact spares Canadian banks tax penalties

* Enforcement of new U.S. tax law set to begin on July 1

* Challenge by two bankers' groups to U.S. law persists

By Louise Egan and Patrick Temple-West

OTTAWA/WASHINGTON, Feb 5 (Reuters) - Canada and the United States on Wednesday unveiled a tax information-sharing pact, advancing the Obama administration's fight against tax dodgers, although challenges remained to implementing a U.S. international tax transparency law.

Set to take effect on July 1, President Barack Obama's Foreign Account Tax Compliance Act (FATCA) will require foreign banks to share information about Americans' accounts worth more than $50,000 with the Internal Revenue Service, the U.S. tax agency.

The enactment of FATCA in 2010, after a scandal involving Americans hiding money in Swiss bank accounts, has resulted in a web of bilateral tax deals between the United States and 22 other countries, with Canada and Hungary the latest signatories.

"The agreements announced today clearly demonstrate the considerable international support behind FATCA," Robert Stack, the U.S. Treasury Department's deputy assistant secretary for international tax affairs, said in a statement.   Continued...