Updated FATCA Intergovernmental Agreements model - 22/05/2013
On 9 May 2013, the U.S. Treasury released updated Model Intergovernmental Agreements (“IGAs”) to improve international tax compliance and implement FATCA. The most significant development with the new releases is that the U.S. Treasury will now enter into IGAs with jurisdictions that do not have a preexisting tax information exchange agreement (“TIEA”) or bilateral income tax treaty.
In addition to the new IGAs, the U.S. Treasury released four new versions of the IGA Annexes (two for Model 1 and two for Model 2). Generally, each IGA will have an Annex 1 and Annex 2.
As in the prior versions of the Annexes, Annex 1 of the IGA provides documentation and due diligence requirements applicable to FFIs in the jurisdiction while Annex 2 provides the requirements for exempt entities and products in the jurisdiction. The Model 2 has changed significantly in that it now appears to standardise the list of exempt entities and products for all countries as opposed to the previous approach of customising the exempt entities and products on a country by country basis. A footnote within the Annex 2 indicates that the U.S. Treasury will no longer entertain requests from countries to relax the rules contained within the A nnex and will only modify them in exceptional circumstances.
In this respect, please find enclosed the news alert prepared by our US colleagues highlighting the main aspects of the new IGAs model.
If you have any queries regarding the above, please do not hesitate to contact us.
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