Cambodia on alert for US taxpayers
With the Internal Revenue Service, the tax-collection arm of the United States government, stepping up its global sweep to catch American individuals and corporations hiding their overseas earnings, the American Chamber of Commerce in Cambodia on October 26 held a presentation for investors and financial institutions to make sure they are in compliance with US tax laws so as to avoid the discomfort of an IRS probe. Legal experts and banking officials warned of the strict penalties for US taxpayers and onerous standards on local banks outlined in the Foreign Account Tax Compliance Act. The US tax legislation, which Cambodia has implemented since 2014, requires foreign financial institutions to hand over data on the identity and assets of US citizens and business interests to the US Treasury Department. “If foreign financial institutions have American bank account holders, or are dealing with a potential US taxpayer, they are required to report to the IRS,” explained Joseph Lovell, a senior legal counsel at regional law firm Sciaroni and Associates. Failure to adequately report has myriad consequences that can include a foreign bank withholding 30 percent of the payments for an individual or corporation, and thousands of dollars worth of fines, he added.
