In line with their commitment to promote and ensure ethical behavior in the financial and economic fields, the Holy See and the United States have signed an agreement to fight tax evasion.
According to a joint press release, the Holy See’s Secretary for Relations with States, Archbishop Paul Gallagher, and the U.S. Ambassador to the Holy See, Kenneth F. Hackett, signed an agreement between the Holy See and the United States of America today. The Holy See acted in the name and on behalf of Vatican City State.
The aim of the agreement, the statement noted, is “to improve international tax compliance and exchange of tax information in view of the U.S. Foreign Account Tax Compliance Act (FATCA).”
This agreement marks the first formal inter-governmental agreement between the Holy See and the United States and will prevent tax evasion and facilitate the compliance of fiscal duties by those U.S. citizens who conduct financial activities in Vatican City State.
“Ensuring the payment of taxes and preventing tax evasion are of crucial economic importance for every community since adequate tax revenues and public spending are indispensable for governments to become instruments of development and solidarity, to encourage employment growth, to sustain business and charitable activities, and to provide systems of social insurance and assistance designed to protect the weakest members of society,” the release stated.
“In a context of economic globalization,” it continued, “it is therefore essential to strengthen the exchange of information with the view to prevent tax evasion.”
Given this, the agreement signed today has been based on the most up-to-date global standards to curtail offshore tax evasion through the automatic exchange of tax information.
Archbishop Paul Richard Gallagher said the signing of the agreement is “unquestionably an historic event.”
“This is, in fact, the first time that the Holy See and the United States of America have concluded a formal intergovernmental agreement, thus raising to an even higher level the broad cooperation and friendship that already exist between the Apostolic See and the Government of the United States. Moreover, the subject matter of this agreement – designed to contrast tax evasion through the exchange of relevant information – is of key importance to both the Holy See and the United States,” he said.
“As Pope Francis frequently reminds us, evading just taxes is stealing both from the State and from the poor,” the Vatican official added. “Every person has in fact the duty to contribute, in charity and justice, to the common good, according to his own abilities and the needs of others, by promoting and assisting the public institutions dedicated to bettering the conditions of human life (cfr. Gaudium et Spes 30).”
Ambassador Hackett echoed the importance of the agreement.
“Today’s signing marks a significant step in both the United States’ and Holy See’s efforts to work collaboratively toward a global standard to combat offshore tax evasion,” he said, noting, “It also aligns with our mutual commitment to work together to detect, deter, and discourage offshore tax abuses through increased transparency and enhanced reporting. In partnership with the Holy See, we are working towards building a stronger, more stable, and more accountable global financial system.”