South Korea has announced that it has agreed to the regular exchange of information with the US from next year to assist the implementation of the Foreign Account Tax Compliance Act (FATCA).
The FATCA legislation in the US aims to ensure that the US receives data held by foreign financial institutions (FFIs) by US persons. If an FFI does not disclose the relevant information it may be required to withhold tax at 30% when US source income is paid out. The two countries have agreed on the wording of an intergovernmental agreement (IGA) that will provide for automatic information exchange between the two tax administrations.
