The US Treasury Department said yesterday it had reached tentative agreements with Switzerland and Japan to help banks in those countries comply with tax compliance regulations on expat Americans known as FATCA, Reuters reported.

Starting from 2014, US authorities will begin to crack down on foreign financial institutions - a term covering a broad range of institutions - for failing to disclose information to government authorities about clients who are US citizens.

The Swiss and Japanese deals expand the list of countries already cooperating with the US authorities to implement FATCA. The Treasury said in February it was negotiating with France, Germany, Italy, Spain and UK to set up government-to-government information-sharing deals.

The act will require FFIs to report to the US government and withhold 30 per cent tax on US sourced income and gross proceeds of sale in cases of non-compliance. This regulation is expected to be finalised by the end of summer 2012 and fully implemented by the end of 2017.

To view a recent article on the FATCA legislation and the steps that financial institutions must take to prepare for it, click here.