US-Israel FATCA agreement enters into force

The US Treasury has announced on its website that the US-Israel Model 1 FATCA intergovernmental agreement (IGA), signed by the countries on June 30, 2014, entered into force as of August 29.

The US-Israel FATCA IGA been treated by the US as if it was in effect since June 30, 2014.

FATCA, signed into US law on March 18, 2010, is designed to combat offshore tax evasion by US persons with offshore bank accounts and investments, imposing a withholding tax on foreign financial institutions and other entities that refuse to disclose to the US information about their US customers.

In September, Israel’s High Court rejected a challenge to laws implementing FATCA in Israel, concluding that the scheme did not invade the privacy of Israelis.

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