Treasury to Publish New Model FATCA IGAs for Countries Lacking Tax Treaties or Information Exchange Agreements with the U.S.

The Treasury will soon publish new forms of Model 1 and Model 2 FATCA Intergovernmental Agreements ("IGAs") that can be used by countries which do not have existing tax treaties or tax information agreements with the United States, International Tax Counsel Danielle Rolfes announced at the Federal Bar Association Tax Section annual conference on March 1. These new forms of IGA will include additional relevant provisions, such as confidentiality provisions and procedural rules, that are typically found in tax information exchange agreements. This new Model 1 IGA will only be in the non-reciprocal version and will be entered into only with those countries that the United States is comfortable will stand by their international agreements.

Rolfes also announced that, while the existing Model 1 and Model 2 IGA templates will be revised shortly to reflect "small tweaks" made in the final FATCA regulations, she did not foresee subsequent changes to the templates. Once these revised templates are released, the Treasury will be very reluctant to negotiate specific changes to the templates with countries. Further, she indicated that, with the detail provided by the final regulations, the need for extended negotiations with countries over what accounts or institutions should be deemed compliant or exempt in Annex II is greatly reduced, and that, accordingly, the IGA negotiation process should be accelerated.