Proposed regulations to implement the Foreign Account TaxCompliance Act (FATCA) released last week seem somewhat lessonerous than expected for U.S. corporations that make paymentsoverseas. The proposed regs also include measures that alleviateforeign financial institutions' concerns about the cost ofcomplying and possible conflicts between FATCA and local laws.

As part of the government's effort to curb tax evasion, FATCArequires the disclosure of information about overseas bank accountsof U.S. taxpayers. The enforcement mechanism is a 30% tax that mustbe withheld when paying foreign entities that are not in compliancewith FATCA.

Companies' accounts payable departments should have an easiertime with compliance, says Joan Arnold, head of the tax departmentat the law firm Pepper Hamilton in Philadelphia.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.