Netherlands Signs FATCA IGA with U.S.

On December 18, the Kingdom of the Netherlands and the United States signed a Model 1A (Reciprocal) Intergovernmental Agreement ("IGA") under FATCA. Under the terms of the IGA, beginning in September 2015, the Dutch Tax and Customs Administration will automatically exchange data with the U.S. Internal Revenue Service with respect to bank and financial accounts and interests in Dutch financial institutions that are owned directly or indirectly by U.S. persons, and the U.S. will transmit similar information with respect to Dutch taxpayers to the Dutch tax authorities. Annex II to the IGA contains exemptions from FATCA registration and reporting for specific retirement plans and Non-Profit Organizations, including any pension fund regulated under the Pension Act (Pensioenwet), certain industry-wide and occupational pension funds, and certain Non-Profit Organizations described in Article 5b-d of the Netherlands General Tax Act.

The Netherlands and the United States also entered into a Memorandum of Understanding ("MOU") with respect to the IGA that sets forth a timetable for approval by the Dutch Parliament and for the adoption of implementing legislation by September 30, 2015. Under the MOU, the United States agrees that Dutch financial institutions can rely on the IGA as if fully in force until September 2015, and potentially until September 2016 upon notification by the Netherlands of a reasonable delay in the adoption of implementing legislation. In IRS Notice 2013-43, the IRS announced that it generally would permit financial institutions in countries where an IGA had been signed, but was not yet in force, to rely upon such IGA. The MOU also provides interpretations of some of the provisions in the IGA.

In other FATCA news, Japan and the United States have entered into an amendment to the Model 2 Form IGA that was originally signed on June 20, 2013 to modify various effective dates in the IGA to be consistent with the six-month extension of FATCA implementation announced by the U.S. IRS in Notice 2013-43.

Copies of the U.S.-Netherlands IGA and Memorandum of Understanding, and the amendment to the IGA between the United States and Japan, are linked below.

See: Dutch FATCA IGA; Netherlands MOU; Japan's Modifications to Japan IGA.See also: Cabinet: FATCA Materials.For more information, please contact Daniel Mulcahy and Mark Howe.