The US IRS on January 12 2015 announced that its international data exchange service (IDES) website is open for enrollment. Financial institutions and host country tax authorities will use IDES to securely send their information reports on financial accounts held by U.S. persons to the IRS under the Foreign Account Tax Compliance Act (FATCA) or pursuant to the terms of an intergovernmental agreement (IGA), as applicable.
Using IDES, a web application, the sender encrypts the data and IDES encrypts the transmission pathway to protect data transfers. Encryption at both the file and transmission level safeguards sensitive tax information. IDES will also enable the US to make reciprocal exchanges as described in the IGAs to the host country tax authority on accounts in US financial institutions held by the jurisdiction’s residents.IGA
According to IRS, more than 145,000 financial institutions have registered through the IRS FATCA registration system and that the US has signed or has agreed in substance to more than 110 IGAs. By the exchange of information in connection with the FATCA legislation the IRS aims to ensure that US citizens abroad are declaring and paying the correct amount of US tax on their investment income.
