The United States Department of the Treasury recently released the text of six new intergovernmental agreements (IGAs) for the implementation of FATCA (the Foreign Account Tax Compliance Act). Four of these are reciprocal Model 1 IGAs between the United States and Malta, the Netherlands, Guernsey, and the Isle of Man. The fifth is a reciprocal Model 1A IGA between the United States and Jersey. The sixth is a reciprocal Model 2 IGA between the U.S. and the Netherlands.
Under a Model 1 IGA, financial institutions (FFIs) in the foreign jurisdiction report specified information about their U.S. accounts to the tax agency of their government, which in turn reports the information to the IRS on an automatic basis. Under a Model 2 IGA, the foreign jurisdiction agrees to direct and enable all relevant financial institutions (FFIs) in the jurisdiction to report specified information about their U.S. accounts directly to the IRS. FFIs also report to the IRS aggregate information with respect to holders of pre-existing accounts who do not consent to have their account information reported, on the basis of which the IRS may make a “group request” to the partner jurisdiction for more specific information.
The signing of these six new IGAs is brings the number of FATCA agreements to 18. The IGAs previously signed are with the Cayman Islands, Costa Rica, Denmark, France, Germany, Ireland, Japan, Mexico, Norway, Spain, Switzerland, and the United Kingdom.