By Kalen Smith, Big4.com Blogger

The Foreign Accounts Tax Compliance Act goes into effect at the beginning of 2013. KPMG has warned that changes in the tax laws are going to come at a significant cost to businesses. The new laws regarding tax compliance are going to require many companies to make drastic changes to their financial operating procedures.

Regardless of what measures companies take to ensure they meet these guidelines, they may have a significant likelihood that they will fail to meet the new standards. A delay in processing their tax payments on time could result in a 30% tax penalty.

As the global FATCA leader at KPMG, Adrian Harkin said companies will need time to understand the new regulations and how to respond to them. For the time being, they are forced to wait for clarification from the government on what changes are being made.

According to a few rumors, a few exceptions will be made to the new policies. For example, guidance on some payments may be exempt from the overdue regulation paper. However, companies are likely to experience losses as they plan for details that may or may not emerge as a result of the new compliance standards.

Harkin feels that the IRS should interact more closely with the industry to better understand the requirements of the new legislation.

Comments are closed.