November 15, 2012: Denmark FATCA Intergovernmental Agreement
Foreign Account Tax Compliance Act (FATCA)
Denmark is the second country to sign an IGA with the U.S. after the U.K signed in September 2012
On November 15, 2012, Denmark and the United States signed an Intergovernmental Agreement (IGA) to improve international tax compliance and implement FATCA. The agreement is the same Model I agreement (reciprocal version) released in July by the United States and five European Union countries (France, Germany, Spain, Italy and the United Kingdom) and includes reciprocal reporting obligations for the United States.
Annex II of the Agreement identifies the Government of the Kingdom of Denmark, the Central Bank of Denmark and certain Danish pension funds that are recognized under the U.S. Danish tax treaty as Exempt Beneficial Owners. The category of Deemed-Compliant entities under Annex II includes small financial institutions with predominantly Danish client bases, certain collective investment vehicles regulated by Danish law, nonprofit organizations and housing cooperatives. Lastly, Annex II declares certain retirement and tax-favored accounts as Exempt Products.
Denmark is the second country to sign an IGA with the U.S. after the U.K signed in September and further bolsters the U.S.’s position to solve the global FATCA compliance problem using the IGA methodology. Denmark was also included in a recent list published by the U.S. Treasury to be one of the countries it was actively negotiating with to conclude an IGA by year-end. According to the same announcement, the U.S. expects to conclude an additional fifteen IGAs by the end of 2012.