India Agrees "in Substance" to FATCA Model 1 IGA

India announced that it agreed with the United States "in substance" to the terms of a Model 1 Intergovernmental Agreement ("IGA") to implement FATCA. The agreement, which was concluded on April 11, according to the U.S. Treasury, will require financial entities in India to report information on U.S. account holders to the Indian Central Board of Direct Taxes ("CBDT"). The CBDT will then automatically forward such information to the U.S. IRS. The Securities and Exchange Board of India ("SEBI") is expected to issue appropriate guidelines in 2014-2015 to market intermediaries on due diligence and reporting requirements under FATCA. The actual agreement will not be released until the IGA is signed by representatives of both countries. However, under Announcement 2014-17, India will be deemed to have the IGA in effect immediately and Indian financial institutions will be able to register with the IRS as Model 1 FFIs through December 31, 2014 – the date by which the IGA must be signed to remain considered in effect. The most recent list of jurisdictions with either signed or "in substance" IGAs is linked below.

See: FATCA IGA List.See also: Cabinet FATCA Materials (for Cabinet subscribers only).For more information, please contact Daniel Mulcahy and Mark Howe.