Israel and the US have agreed on the wording of an intergovernmental agreement (IGA) that will enable the provisions of the US Foreign Account Tax Compliance Act (FATCA) to be carried out in Israel. The FATCA takes effect from 1 July 2014 and from this date foreign financial institutions (FFIs) will be required to disclose details of accounts held with them by US persons. If they do not disclose the appropriate details they will need to withhold tax of 30 percent when they pay over US sourced income. The agreement provides for the reciprocal exchange of information so Israel may also obtain information on US accounts held by its residents.
