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May 9, 2013: U.S. Treasury Releases Updated FATCA Model Intergovernmental Agreements (IGAs)

Foreign Account Tax Compliance Act (FATCA)


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Model intergovernmental agreements

On May 9, 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. To this end, the U.S. Treasury introduced two new model agreements: a non-reciprocal Model 1B Agreement and a Model 2 Agreement. The release also includes two updated reciprocal and non-reciprocal Model 1 agreements (Reciprocal Model 1A and Non-reciprocal Model 1B) for countries with a preexisting TIEA or bilateral income tax treaty and an updated Model 2 agreement for countries with a preexisting 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 Annex 2 has changed significantly in that it now appears to standardize the list of exempt entities and products for all countries as opposed to the previous approach of customizing 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 Annex and will only modify them in exceptional circumstances. The approach results from the U.S. Treasury’s extensive consultation with global financial institutions and governments and appears to follow the approach adopted with Annex 1 of the IGAs.

Deloitte will continue to follow any additional developments and intend to provide a complete analysis of the new IGAs and Annexes.

List of updated model IGAs and annexes:

  • Reciprocal Model 1A Agreement, Preexisting TIEA or DTC (Updated 5-9-2013)
  • Nonreciprocal Model 1B Agreement, Prexisting TIEA or DTC (Updated 5-9-2013)
  • Nonreciprocal Model 1B Agreement, No TIEA or DTC (Updated 5-9-2013)
  • Model 2 Agreement, Preexisting TIEA or DTC (Updated 5-9-2013)
  • Model 2 Agreement, No TIEA or DTC (Updated 5-9-2013)
  • Annex I to Model 1 Agreement (Updated 5-9-2013)
  • Annex I to Model 2 Agreement (Updated 5-9-2013)
  • Annex II to Model 1 Agreement (Updated 5-9-2013)
  • Annex II to Model 2 Agreement (Updated 5-9-2013)

Full article, model IGAs and IGA Annexes are available for download. For more information please contact a Deloitte FATCA Leader or click here.

As used in this document, “Deloitte” means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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